10 September 2018
Ramu Mineral Resource and Ore Reserve Update
Highlands Pacific Limited (ASX:HIG) has received updated Mineral Resource and Ore Reserve estimates for the Ramu nickel and cobalt deposit from the project manager Ramu NiCo Management Limited (MCC).
These reports were prepared for and are the responsibility of Ramu NiCo Management (MCC) Limited, the operator and manager of the joint venture. The updated Mineral Resource estimate, as at 15 June 2018, is a total of 136 million tonnes at an average grade of 0.9% nickel and 0.1% cobalt. This compares with the previous estimate, as at December 2016, of 124 million tonnes at 1.0% nickel and 0.1% cobalt, which has been depleted by mining and increased by drilling in the intervening period.
The full Mineral Resource estimate is set out in the following table, at a cut-off grade of 0.5% Nickel.
Category Mineral Resource Average grade Mt Ni% Co% Measured 34 0.9 0.1 Indicated 42 0.9 0.1 Subtotal 76 0.9 0.1 Inferred 60 1.0 0.1 Total 136 0.9 0.1
Notes: 1. Totals may not equal the sum of the component parts due to rounding adjustments. 2. Ore tonnes (dry) represent the -2 mm economic portion of resource mineralization in the rocky saprolite COMPETENT PERSON’S STATEMENT The information in this report that relates to the Ramu Mineral Resources is based on information compiled by Zhang Xueshu, who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Zhang Xueshu is a full-time employee and Chief Geologist of Sinomine Resources Exploration Co and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Zhang Xueshu consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
The updated Ore Reserve estimate, as at 15 June 2018, is a total of 56 million tonnes at an average grade of 0.9% nickel and 0.1% cobalt. This compares with the previous estimate, as at 31 December 2016, of 49 million tonnes at 1.0% Ni and 0.1% Co, which has been depleted by mining and increased by drilling in the intervening period.
Category Ore Reserve Average grade (%)
Mt Ni% Co% Proved 24 0.9 0.1 Probable 33 0.9 0.1 Total 56 0.9 0.1
Notes: 1. Totals may not equal the sum of the component parts due to rounding adjustments. 2. Ore tonnes (dry) represent the -2 mm economic portion of resource mineralization in the rocky saprolite. 3. Based on a nickel price of US$12,000/t, and cobalt price of US$48,501/t. COMPETENT PERSON’S STATEMENT The information in this report that relates to the Ramu Ore Reserves is based on information compiled by Mr Gao Xiang, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Gao Xiang is a part-time employee of Sinomine Resources Exploration Co and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Gao Xiang consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The full Resource and Reserve statement is attached to this announcement. Extracts of the report are reproduced here in accordance with the ASX Listing Rules 5.8 and 5.9. Geology and Geological Interpretation Ramu mining area is located on the northern margin of New Guinea thrust fold zone in New Guinea orogenic zone. The outcrop in this area is the Tertiary (N1) Marum basic-ultra basic rock zone (ophiolite complex), which is the main ore source rock of lateritic nickel ore. The laterite horizons containing Ni, Co in the mining area are distributed on the dunite, orthopyroxene peridotite and peridotite of Marum ultra basic rock zone. The ultra-basic rocks are distributed on a series of highland platforms, forming the landform surrounded by faults to have horst characteristics. This deposit is typical lateritic NiCo ore formed by ultra basic rock after weathering and leaching. The laterite NiCo deposits are occurred in the dunite weathering crust. The laterite weathering crust exposed in the drilling engineering includes 6 mineralization horizons: from top to bottom, Humic layer (Q), Red limonite (O), Yellow limonite (L), Saprolite(S), upper rocky saprolite (R1) and lower rocky saprolite (R2). In the Humic layer, Ni<0.5%, belonging to the mineralization horizon and not constituting the ore bed of industrial significance, Red limonite Al≥5%, locally Ni≥0.5% containing ore, mostly containing no ore, which is the main cover of the mining area. The Yellow limonite, Saprolite, and upper, lower rocky saprolite are the main ore-bearing horizons of this area.
All ore beds are not varied a lot in thickness, not distributed uniformly, and deficient in local sections. Ni, Mg, Co, Al, Mn, Sc, Fe and other elements in each core bed are different in distribution, but the content distribution generally has a certain rule, where the contents of Ni, Mg are gradually increased from top to bottom in the laterite weathering crust; to the bottom of the lower rocky saprolite, the content of Ni is reduced obviously, and the content of Mg is gradually increased; the content of Al is reduced to the increasing depth, and the contents of Co, Mn are slightly higher in the Saprolite. Sampling and Sub-sampling Techniques All holes are sampled continuously in productive exploration in 2016, with the basic sampling length as 1m. When the distance between sampling point and the lamination position is no more than 0.5m, combined sampling may be applied; separate sampling shall be applied when the distance is greater than or equal to 0.5m. The sample splitting knife is applied for 1/2 splitting the soil horizon for sampling as chemical analysis, and the rest of 1/2 sample is discarded; the full-core sampling is applied for the rocky saprolite. Part of cores was reserved in the intensive exploration in 2017. The core was split by a sampling knife, with 1/2 for sampling; all cores from the gravel-containing horizon were No non-core sample was sampled. The sample processing and the preparation of chemical analysis sample were conducted as per Chinese specifications. Sample processing is divided into coarse crushing and fine crushing. Every stage also includes crushing, screening, uniformly mixing and splitting. The processing method is suitable for lateritic nickel ore and complies with the requirements of mine. Cores were not reserved in 2016, part of cores was reserved in 2017 and the acquisition test of replicate sample of core was not conducted. The sample size matched with the granularity of the sampled target mineral. Drilling Techniques For core drilling, the method of hard alloy drilling accompanied by diamond drilling was mainly applied in drilling exploration. Φ94~110mm open hole and Φ91mm final hole. Cores were not oriented. The 2016 productive exploration and 2017 productive and drilling exploration were carried out by Hubei Geological Survey Institute of Coal, and the 2017 prospective and drilling exploration was carried out by Sinomine Resource Exploration Co., Ltd. Sample Analysis Method The sample analysis was carried out by the testing laboratory of the mine. Test method: test samples are dissolved by hydrochloric acid, nitric acid, hydrofluoric acid and perchloric acid. In the nitric acid medium, the inductively coupled plasma emission spectrometer (Varian 700-ES) is used to measure the mass concentration. The measured scope of NiCo for the method is 0.02~10.0%, which satisfies the production need of the mine. According to the data of the mine, the detection limits of Varian 700-ES for Ni and Co are 5.0μg/L and 13.0μg/L respectively, which meet the needs of test method.
Estimation Methodology The horizontal projection method was used in the productive exploration in 2016 for resources estimation. The ultra-high grade treatment was not enabled, and the boundary of ore body was subject to drilling without extrapolation. The software GEOVIA Surpac was used for the intensive prospecting in 2017. Based on statistical analysis, the ultra-high grade treatment was not enabled, the boundary of ore body was subject to drilling without extrapolation, the size of ore block was 25m×25m×1m (north × east × height), and the inverse distance method was used for grade difference. By means of above methods, the resources were estimated by Hubei Geological Survey Institute of Coal in 2016 productive exploration and 2017 productive exploration and by Sinomine Resource Exploration Co., Ltd. in 2017 prospective exploration. The resources levels were subject to minor adjustment on the basis of this resources estimation. Material Assumptions The nickel price is calculated as per USD 12,000/t, and the cobalt price is calculated as per USD 48,501/t. Combining the market sales in 2017, the nickel containing valuation coefficient of nickel cobalt hydroxide is considered as 75%, and the cobalt containing valuation coefficient considered as 68%. The price of NiCo is determined by the prediction of institutions including the World Bank and the sales status of the mine. Ramu has in place offtake agreements for MHP. MCC relies upon advisory sources when assessing future trends and factors influencing supply and demand. The Ore Reserve estimate has been completed on the basis that all product can be sold. Ramu is an operating asset and has established relationships with customers and market acceptance for its product. The criteria used for classification, including the classification of the Mineral Resources on which the Ore Reserves are based and the confidence in the modifying factors applied Based on the mineralization characteristics of ore body and the production practice in mine, the grid of 50×50m in drilling exploration was defined as the measured resources, grid of 100×100m as the indicated resources and grid greater than or equal to 200×200m as the inferred resources. All of R2 resources were defined as the inferred resources. The relative accuracy of the Mineral Resource estimate is reflected in the reporting of the Mineral Resources to a Measured, Indicated and Inferred classification as per the guidelines of the 2012 JORC code. The mining method selected and other mining assumptions, including mining recovery factors and mining dilution factors A plurality of open mining pits is employed in mine production and quarrying is suitable for the actual production of the mine. Mining surface parameters: Bench height: 5m~10m; Working berm width: 40m~50m; Face angle of working bench: 65°.
The stripping ratio is 0.51, the mining loss rate is 5% and the mining dilution rate is 3%. The inferred mineral resources are not used in mining study and are treated as waste. It is a mine that has been put into production in the Project, with infrastructure in good condition. The processing method selected and other processing assumptions, including the recovery factors applied and the allowances made for deleterious elements; Through ore washing, concentration and other ore dressing processes, the ore slurry with concentration of 20% is thickened and pumped to the lone-distance ore slurry pipeline transportation system. The slurry pipeline adopts the "low concentration, large pipe diameter centrifugal pump turbulent transportation" process scheme for dredging, namely the centrifugal pump turbulent transportation scheme with inner pipe diameter of 610mm. The nickel recovery rate in the ore slurry is 97.5%, and the cobalt recovery rate is 91.91%. Hydrometallurgy includes high pressure acid leaching, ore slurry neutralization, CCD countercurrent washing, removal of iron and aluminum, nickel cobalt hydroxide precipitates by neutralization, obtaining the intermediate product of nickel cobalt hydroxide, and the tailing are discharged to the deep sea landfilling procedure for treatment upon neutralization. For smelting recovery rate, the nickel is 89%, and the cobalt is 88%. This ore dressing and smelting process has been verified by the 5-year production of ore. The basis of the cut-off grade(s) or quality parameters applied The boundary grade is 0.5%, the eliminating thickness of horsestone is 2m and the minimum minable thickness is 0.5m. Material modifying factors, including the status of environmental approvals, mining tenements and approvals, other governmental factors and infrastructure requirements for selected mining methods and for transportation to market Mining License (SML8) covers an area of 54.4km2, and the validity expires on July 26, 2040. The prevailing unincorporated joint venture mode of international large mining development project is used for Ramu Project. Three foreign shareholders: MCC Ramu NiCo Management (MCC Ramu) Limited and the former project developer Highlands Pacific Ltd., local companies on behalf of Papua New Guinea and local land owners constitute the joint venture of Ramu Project. MCC Ramu holds 85% shares of the Project, and other shareholders hold 15% shares of the Project. Ramu NiCo Management (MCC) Limited (Ramu Management) is jointly entrusted by shareholders of the joint venture to take charge of construction, development and operation of the Project as the manager of the joint venture. In 2015, an environmental independent audit was passed and the OEMP permit approved by the Ministry of Environment of Papua New Guinea was obtained.
For further information, please contact: Joe Dowling, Stockwork Corporate - 0421 587 755
ASX Code: HIG POMSoX Code: HIG Shares on Issue: 1,093 million Performance Rights: Nil Directors Ron Douglas, Chairman Craig Lennon, MD/CEO Bart Philemon Anthony Milewski Management Sylvie Moser, CFO and Co Sec Ron Gawi, GM Port Moresby
Investor and Media Enquiries to: Joe Dowling, Stockwork Corporate 0421 587 755
Website: www.highlandspacific.com
About Highlands Pacific Limited Highlands Pacific is a PNG incorporated and registered mining and exploration company listed on the ASX and POMSoX. Its major assets are interests in the producing Ramu nickel cobalt mine and the Frieda River copper gold project; with exploration in progress in the Star Mountains. Highlands also has exploration tenements at on Normanby Island (Sewa Bay). Ramu Nickel Cobalt Mine The producing Ramu nickel cobalt mine is located 75km west of the provincial capital of Madang, PNG. Highlands holds an 8.56% interest in the Ramu project, however this will increase to 11.3% at no cost to Highlands once Highlands’ share of Ramu project debt is repaid to the project manager and joint venture partner Metallurgical Corporation of China (MCC). Highlands recently announced plans to repay the debt to MCC following finalization of a streaming transaction with Cobalt27. Highlands also has an option to acquire an additional 9.25% interest in Ramu at fair market value, which could increase the company’s interest in the mine to 20.55% if the option were exercised. Star Mountains Prospects The Star Mountains exploration tenements are located approximately 20km north of the Ok Tedi mine, in the West Sepik Province, PNG. They lie within the highly prospective New Guinean Orogenic Belt, which hosts the Grasberg, Ok Tedi, Porgera and Hidden Valley mines, as well as the Frieda deposit. Frieda River Copper/Gold Project The Frieda River copper gold project is located 175km north-west of the Porgera gold mine and 75km north-east of the Ok Tedi mine. Highlands has a 20% interest in the project and Frieda River Limited (a wholly owned subsidiary of PanAust Limited which in turn is a wholly owned subsidiary of Guangdong Rising Assets Management Co. Ltd.) has 80%.
Ramu NiCo Resource & Ore Reserve Estimate 2017 Ramu NiCo Management (MCC) Limited
Add: Floor 5, Building A, Wanliuyicheng Plaza,
11 Changchunqiao Rd. Beijing, China
Tel: 010-58815531 010-58815529
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Email: [email protected]
URL: www.nfmec.com
Report
Ramu NiCo Resource & Ore Reserve Estimate 2017
Ramu NiCo Management (MCC) Limited
Effective Date of the Report: 15 June, 2018
Effective Date of Drilling Database: 10 April, 2018
Preparaped By
Sinomine Resource Exploration Co., Ltd.
15th June, 2018
Ramu NiCo Resource & Ore Reserve Estimate 2017 Ramu NiCo Management (MCC) Limited
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CONTENTS DISCLAIMER ................................................................................................................................... 1
GLOSSARY ..................................................................................................................................... 2
ABSTRACT ...................................................................................................................................... 3
1. INTRODUCTION ..................................................................................................................... 9
1.1 PURPOSE AND TASK OF THE PROJECT ................................................................................... 9
1.2 FIELD INVESTIGATION BY COMPETENT PERSON ..................................................................... 9
1.3 LOCATION AND TRAFFIC ........................................................................................................ 10
1.4 MINING RIGHT SETTING......................................................................................................... 10
1.5 OVERVIEW OF PHYSICAL GEOGRAPHY ................................................................................. 12
2. GEOLOGY OF RAMU PROJECT ........................................................................................ 14
2.1 REGIONAL GEOLOGICAL BACKGROUND ................................................................................ 14
2.2 GEOLOGY OF MINING AREA .................................................................................................. 17
3. DEPOSITS TYPE .................................................................................................................. 22
4. MINERALIZATION ................................................................................................................ 22
5. EXPLORATION ..................................................................................................................... 24
5.1 GEOLOGICAL EXPLORATION BEFORE 1999.......................................................................... 24
5.2 INFILL EXPLORATION .............................................................................................................. 27
6 TOPOGRAPHY AND ENGINEERING SURVEY ................................................................ 30
6.1 PRODUCTIVE EXPLORATION IN 2016 ..................................................................................... 30
6.2 INFILL EXPLORATION IN 2017 ................................................................................................ 31
7 DRILL ..................................................................................................................................... 31
7.1 PRODUCTIVE EXPLORATION IN 2016 ..................................................................................... 31
7.2 INFILL EXPLORATION IN 2017 ................................................................................................ 33
8 SAMPLING AND LOGGING ................................................................................................ 35
8.1 CORE SAMPLING .............................................................................................................. 35
8.2 CORE LOGGING ................................................................................................................ 37
9 SAMPLE PREPARATION, ANALYSES AND SECURITY ................................................ 39
9.1 SAMPLE PREPARATION .......................................................................................................... 39
9.2 SAMPLE ANALYSIS AND TEST ................................................................................................ 45
9.3 QA/QC .................................................................................................................................. 49
9.4 SAMPLE SECURITY ................................................................................................................ 54
10 DATA VERIFICATION ...................................................................................................... 56
10.1 DATABASE .......................................................................................................................... 56
10.2 ON-SITE VERIFICATION ......................................................................................................... 56
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11 MINERAL RESOURCE ESTIMATE................................................................................. 57
11.1 ESTIMATION RESULTS OF PREDECESSORS .......................................................................... 57
11.2 COMMENTS ON THE HISTORICAL RESOURECS ESTIMATION .................................................. 64
11.3 ESTIMATION RESULTS ............................................................................................................ 65
11.4 RELIABILITY ............................................................................................................................ 67
11.5 MINING SITUATION ................................................................................................................. 67
11.6 REMAINED IN-SITU RESOURCE .............................................................................................. 68
12 MAKET ASSESSMENT .................................................................................................... 70
12.1 NICKEL ................................................................................................................................... 70
12.2 COBALT .................................................................................................................................. 71
13 INFRASTRUCTURE AND LOGISTICS ........................................................................... 73
13.1 PROJECT OVERVIEW ............................................................................................................. 73
13.2 PLANT SITE ............................................................................................................................ 74
13.3 WATER SUPPLY...................................................................................................................... 74
13.4 POWER SUPPLY ..................................................................................................................... 74
13.5 OTHERS ................................................................................................................................. 74
14 MINING PLAN ................................................................................................................... 75
14.1 STRIPPING PROCESS ............................................................................................................. 75
14.2 MINING PROCESS ................................................................................................................... 76
15 PROCESSING PLAN ........................................................................................................ 77
16 METALLURGICAL PLAN ................................................................................................ 78
17 ENVIRONMENT ................................................................................................................ 78
18 FINANCIAL ANALYSES .................................................................................................. 80
18.1 INVESTMENTS ........................................................................................................................ 80
18.2 COSTS .................................................................................................................................... 80
18.3 SALES REVENUE, TAXES AND PROFITS.................................................................................. 80
19 ORE RESERVE ESTIMATE ............................................................................................. 81
19.1 RESERVE CLASSIFICATION .................................................................................................... 81
19.2 FIELD INVESTIGATION ............................................................................................................ 81
19.3 RESERVE ESTIMATION RESULTS .......................................................................................... 81
REFERENCES............................................................................................................................... 82
TABLES
TABLE 1-1 METEOROLOGICAL DATA STATISTICS OF KURUMBUKARI MINING AREA IN 2007 .......... 14
TABLE 5-1 MAIN GEOLOGICAL SURVEY WORKLOAD IN RAMU MINING AREA BEFORE 1999 ......... 26
TABLE 7-1 STATISTICS OF RECOVERY RATES OF STRATA ................................................................. 33
TABLE 9-1 STATISTICAL TABLE FOR ANALYSIS QUALITY INSPECTION OF REPLICATE SAMPLES ........ 51
Ramu NiCo Resource & Ore Reserve Estimate 2017 Ramu NiCo Management (MCC) Limited
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TABLE 9-2 STATISTICAL TABLE FOR ACCURACY QUALITY INSPECTION OF HIGH GRADE (NI>1.05%)
STANDARD SAMPLES ........................................................................................................................ 53
TABLE 9-3 STATISTICAL TABLE FOR ACCURACY QUALITY INSPECTION OF LOW GRADE (NI<0.6%)
STANDARD SAMPLES ........................................................................................................................ 53
TABLE 11-1 SUMMARY FOR PRODUCTIVE EXPLORATION RESOURCES ESTIMATION RESULTS OF
RAMU NICO IN 2016 ........................................................................................................................ 59
TABLE 11-2 SUMMARY FOR PRODUCTIVE EXPLORATION OF THE LOWER ROCKY SAPROLITE (R2 )
RESOURCES ESTIMATION RESULTS OF RAMU NICO IN 2016 ............................................................. 59
TABLE 11-3 STATISTICAL TABLE OF SPECIFIC GRAVITY SAMPLE AND MOISTURE MEASUREMENT
RESULTS OF ORE ............................................................................................................................... 61
TABLE 11-4 SPHEROID PARAMETER FOR RESOURCES ESTIMATION SEARCHING OF RAMU NICO AT
PROSPECTIVE AREA IN 2017 ............................................................................................................. 62
TABLE 11-5 RESULT TABLE FOR RESOURCES ESTIMATION OF RAMU NICO AT PROSPECTIVE AREA
IN 2017 ................................................................................................................................. 63
TABLE 11-6 RESOURCES ESTIMATION RESULTS TABLE OF RAMU NICO AT PRODUCTIVE
EXPLORATION AREA IN 2017 ............................................................................................................ 64
TABLE 11-7 RESOURCES ESTIMATION RESULTS TABLE FOR PRODUCTIVE EPLORATION AREA IN
2016 ................................................................................................................................. 65
TABLE 11-8 RESOURCES ESTIMATION RESULTS TABLE FOR PROSPECTIVE EXPLORATION AREA IN
2017 ................................................................................................................................. 65
TABLE 11-9 RESOURCES ESTIMATION RESULTS TABLE FOR PRODUCTIVE EXPLORATION AREA IN
2017 ................................................................................................................................. 66
TABLE 11-10 RESOURCES ESTIMATION RESULTS TABLE FOR EXPLORATION AREA IN 2016-2017 .... 66
TABLE 11-11 ESTIMATION RESULTS TABLE FOR RESOURCES CONSUMED WITHIN RAMU PROJECT 67
TABLE 11-12 THE REMAINED IN-SITU RESOURCE WITHIN ALL RAMU PROJECT AREA .................... 69
TABLE 11-13 RESULTS OF THE RAMU MINERAL RESOURCES ESTIMATE 2016 ................................ 69
TABLE 19-1 RESULTS OF ORE RESERVES ESTIMATION WITHIN ALL RAMU PROJECT AREA ............ 81
TABLE 19-2 31TH DECEMBER 2016 RAMU ORE RESERVE BY CLASSIFICATION ............................... 82
FIGURES
FIG. 1-1 GEOLOGICAL LOCATION OF MINING AREA ................................................................... 10
FIG. 1-2 LOCATION MAP OF MINING RIGHTS (EL193 AND SML8) ................................................ 11
FIG. 1-3 EXPLORATION AREA IN 2016-2017 ................................................................................ 12
FIG. 2-1 TECTONIC UNIT OF PAPUA NEW GUINEA ....................................................................... 15
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FIG. 2-2 REGIONAL GEOLOGICAL MAP OF RAMU NICO MINING AREA ........................................ 15
FIG. 2-3 OXBOW LAKE SAW ON THE AERIAL PHOTO OF RAMU NICO MINING AREA ................... 16
FIG. 2-4 SCHEMATIC DIAGRAM FOR DIVISION OF RAMU NICO WEATHERING CRUST HORIZON .. 18
FIG. 2-5 HUMIC LAYER AND RED LIMONITE ................................................................................ 18
FIG. 2-6 YELLOW LIMONITE AND ELUVIUM ................................................................................ 19
FIG. 2-7 SAPROLITEWITH MNCO SOIL ......................................................................................... 20
FIG. 2-8 DUNITE GRAVEL IN THE UPPER ROCKY SAPROLITE ........................................................ 20
FIG. 2-9 LOWER ROCKY SAPROLITE AND DUNITE BEDROCK ........................................................ 21
FIG. 4-1 PROFILE OF RAMU LATERITE WEATHERING CRUST ........................................................ 23
FIG. 9-1 COMPARISON FOR THE GRADE OF NI IN REPLICATE SAMPLES AND ORIGINAL SAMPLES 51
FIG. 9-2 COMPARISON FOR THE GRADE OF CO IN REPLICATE SAMPLES AND ORIGINAL SAMPLES
.................................................................................................................................... 52
FIG. 9-3 DISTRIBUTION FOR THE GRADE OF NI OF BLANK SAMPLES ........................................... 54
FIG. 9-4 DISTRIBUTION FOR THE GRADE OF CO OF BLANK SAMPLES .......................................... 54
FIG. 11-1 RAMU NICO MINING AREAL MAP ................................................................................. 68
FIG. 12-1 AVERAGE ANNUAL SPOT PRICE OF INTERNATIONAL NICKEL (LME) FROM 2007 TO 201671
FIG. 12-2 DOMESTIC AND INTERNATIONAL COBALT PRICE CHANGING CURVE .............................. 73
FIG. 16-1 PROCESS FLOW DIAGRAM FOR SMELTING ..................................................................... 79
APPENDIXS
APPENDIX A- Competent Person’s Consent Form
APPENDIX B- Compliance Statements
APPENDIX C-JORC TABLE 1
Ramu NiCo Resource & Ore Reserve Estimate 2017 Ramu NiCo Management (MCC) Limited
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Disclaimer
This report is only for Ramu NiCo Management (MCC) Limited to use, and
it must be used in whole, without being quoted out of context. In case of use by
the third party, please refer to the disclaimer in this report.
Instruction to the third party
This report is only for Ramu NiCo Management (MCC) Limited to use. If
you are not from Ramu, please note:
- This report is drafted according to client’s special demands and
interests and client’s requirements, without considering any others’ special
demands or interests. Your demands and interests may be different from
client’s, and this report may not fully meet or apply to your demands.
- Any statement or commitment will not be made to you, even so, it is
hereby declared not to be responsible for these statements or commitments,
either expressed or implied, either relevant to this report or relevant to the
conclusion or comment in this report (including but not limited to any standard
used for drafting this report, or any forward-looking statement, forecast,
comment in this report or statement or commitment speculated to be realized,
proving correct or based on reasonable assumption, etc.).
- It is clearly declared no responsibility for you, and no obligation for you.
- You are not authorized to depend on this report. If you chose to use or
depend on all or part of the contents in this report, you shall assume all risks in
loss or damage arising from this.
Ramu NiCo Resource & Ore Reserve Estimate 2017 Ramu NiCo Management (MCC) Limited
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Glossary
Term Definition
℃ degrees Celsius
Co cobalt
E East
g Gram
GPS global position system
JORC Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves prepared by the Joint Ore Reserves
Committee of the Australasian Institute of Mining and Metallurgy,
Australian Institute of Geoscientists and Minerals Council of Australia
(JORC), December 2012.
kg Kilogram
km Kilometre
km2 square kilometre
m Metre
M Million
m3 cubic metre
Mt million tonnes
N North
Ni nickel
QA/QC quality assurance/quality control
RTK real-time kinematic
S South
t Tonne
W West
> greater than
< less than
% percent
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Abstract
Project Background
Ramu NiCo Project, located in Madang Province, Papua New Guinea, is a
world-class mining project integrating mining, dressing and smelting. To promote
upgrading of resources, increase recoverable reserves, effectively prolong the
service life of mine, in 2016-2017, Ramu NiCo Management Limited carried out
infill exploration and prospective exploration within the mining right. The
resources and reserves in 2016-2017 within the scope of work are estimated in
this report according to the exploration work in 2016-2017, in combination with
the predecessor’s work in this area and according to the requirements of the
specification JORC (2012). The effective date of resources and reserves
estimation is June 15, 2018.
Field Investigation by Competent Person
The competent person Zhang Xueshu carried out field investigation on July
1-6, 2017, and the supervision work in other times was executed by field
supervisors based on QA/QC procedures audited by the competent person or
under the supervision of the competent person.
Traffic and Location
Ramu NiCo Project, located in Madang Province, Papua New Guinea,
consists of mine (including washery), smelting plant and 135km ore slurry pipeline
connecting the mine and the smelting plant. The mine is located in Kurumbukari,
75km from the southwest of Madang, the smelting plant is built along Basamuk
Bay, 55km from the southeast of Madang City, the mine is about 90km from the
smelting plant, and about 135km from the ore slurry pipeline. Madang City is
connected with the port city Lae by an expressway, called as Madang-Lae
Expressway. From Brahman in the middle of the expressway to Kurumbukari in
the Ramu mining area, there is 60km expressway connected in the mining area.
Mining Right
The Exploration License (EL193) of Ramu NiCo Project covers an area of
194.95km2, and the validity expires on February 26, 2018. The Mining License
(SML8) covers an area of 54.4km2, and the validity expires on July 26, 2040. The
drilling exploration area within the scope of Mining License is about 25km2,
Mineral Resource & Ore Reserve Estimate in 2017 Ramu NiCo Management (MCC) Limited
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consisting of Kurumbukari area, western Ramu area, Great Ramu area,
collectively known as Ramu mining area.
The prevailing unincorporated joint venture mode of international large
mining development project is used for Ramu Project. Three foreign shareholders:
MCC Ramu NiCo Management (MCC Ramu) Limited and the former project
developer Highlands Pacific Ltd., local companies on behalf of Papua New
Guinea and local land owners constitute the joint venture of Ramu Project. MCC
Ramu holds 85% shares of the Project, and other shareholders hold 15% shares
of the Project. Ramu NiCo Management (MCC) Limited (Ramu Management) is
jointly entrusted by shareholders of the joint venture to take charge of
construction, development and operation of the Project as the manager of the
joint venture.
Geological Background
Ramu NiCo mining area is located on the northern margin of New Guinea
thrust fold zone in New Guinea orogenic zone. The outcrop in this area is the
Tertiary (N1) Marum basic-ultra basic rock zone (ophiolite complex), which is the
main ore source rock of lateritic nickel ore. The laterite horizons containing Ni, Co
in the mining area are distributed on the dunite, orthopyroxene peridotite and
peridotite of Marum ultra basic rock zone. The ultra-basic rocks are distributed on
a series of highland platforms, forming the landform surrounded by faults to have
horst characteristics.
This deposit is typical lateritic NiCo ore formed by ultra basic rock after
weathering and leaching. The laterite NiCo deposits are occurred in the dunite
weathering crust. The laterite weathering crust exposed in the drilling engineering
includes 6 mineralization horizons: from top to bottom, Humic layer (Q), Red
limonite (O), Yellow limonite (L), Saprolite(S), upper rocky saprolite (R1) and
lower rocky saprolite (R2). In the Humic layer, Ni<0.5%, belonging to the
mineralization horizon and not constituting the ore bed of industrial significance,
Red limonite Al≥5%, locally Ni≥0.5% containing ore, mostly containing no ore,
which is the main cover of the mining area. The Yellow limonite, Saprolite, and
upper, lower rocky saprolite are the main ore-bearing horizons of this area.
All ore beds are not varied a lot in thickness, not distributed uniformly, and
Mineral Resource & Ore Reserve Estimate in 2017 Ramu NiCo Management (MCC) Limited
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deficient in local sections. Ni, Mg, Co, Al, Mn, Sc, Fe and other elements in each
core bed are different in distribution, but the content distribution generally has a
certain rule, where the contents of Ni, Mg are gradually increased from top to
bottom in the laterite weathering crust; to the bottom of the lower rocky saprolite,
the content of Ni is reduced obviously, and the content of Mg is gradually
increased; the content of Al is reduced to the increasing depth, and the contents
of Co, Mn are slightly higher in the Saprolite.
Exploration History
Ramu laterite NiCo deposit was found by Bureau of Mineral Resources of
Australia in 1962. Since then, the deposit has experienced different degrees of
geological work by different corporations in multiple phases. 2,868 holes were
bored before 1999. Since commencement of capital construction, Ramu NiCo
Project has successively carried out capital construction prospecting for two
phases, respectively in 2013, 2015, 2016 and 2017, and conducted intensive
exploration for KBK area in the current working range and local peripheral section,
totally including 3,300 bore holes. 14,854m/1,031 holes were bored in 2016-2017.
Sample Collection, Preparation and Security
The competent person considers sample collection, preparation and security
in 2016-2017 to meet industry standards and satisfy the demands on mine
production.
Data Verification
The competent person verifies the data, and considers the prospecting
sample to be tested in the mine by experiment, meeting the demands on mine
production; but in 2016, QA/QC procedure was not executed for sample analysis
and test, and the credibility was reduced; in 2017, QA/QC procedure was
executed for sample analysis and test, meeting the demands on mine production.
Resources Estimation
Up to June 15, 2018, the depleted resource within all Ramu project area
(removal of consumed resources) are 136Mt, Ni0.9%, Co 0.1%; measured
resources are 34Mt, Ni0.9%, Co 0.1%; indicated resources are 42Mt, Ni0.9%, Co
0.1%; inferred resources are 60Mt, Ni1.0%, Co 0.1%.
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Category Ore Resource Average grade (%)
Remarks (Mt) Ni Co
Measured 34 0.9 0.1 Indicated 42 0.9 0.1 Subtotal 76 0.9 0.1 Inferred 60 1.0 0.1
Total 136 0.9 0.1 Notes:
1.The Ni cut off grade is at 0.5%Ni,and the minimum mineable thickness is at 0.5m. 2.Totals may not equal the sum of the component parts due to rounding adjustments. 3.Ore tonnes (dry) represent the -2 mm economic portion of resource mineralization in the rocky saprolite 4.The QA/QC is not executed in the Productive Exploration in 2016, so 2016 exploration result is not included. 5.The resource and Ore reserves is updated on June 15th, 2018
Reserves Modifying Factors
Ramu NiCo Project, located in Madang, Papua New Guinea, is a world-class
mining project integrating mining, dressing and smelting. The Project consists of
major processes and supporting facilities, such as laterite quarrying, ore slurry
pipeline transportation, metallurgy by high pressure acid leaching, deep-sea
tailing drainage. Since full production was realized at the end of 2012, the
production capacity of Ramu NiCo Project has reached the basic design index
through production operation practice over five years, and achieved operation up
to production and standard.
The current working is still fit for quarrying, opening up by highway
automotive transportation, stripping and mining by hydraulic excavator and
articulated truck, and using the mode of considering “mechanical mining +
hydraulic mining in partial mining area”. The spoil soil is transported to the
designated storage yard or goaf, and ore is directly loaded on the truck and
transported to the concentrating mill. Reclamation includes backfilling and
reclamation of goaf, which are carried out stepwise in the mining process, to
prevent water and soil loss and control erosion. The current annual mining
capacity of the mine is 3.56Mt (dry weight), with stripping ratio of 0.51, mining
loss rate of 5% and mining dilution rate of 3%.
The concentrating mill consists of ore washing workshop, chromite
separation workshop and concentration workshop. The ore washing workshop
adopts two-time sieving and two-section scrubbing flow, producing -3mm ore
slurry (chromium separation material), saw dust and +3mm spoil. -3mm ore slurry
Mineral Resource & Ore Reserve Estimate in 2017 Ramu NiCo Management (MCC) Limited
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is pumped to the chromium separation workshop, +350mm gravel is transported
to the existing raw ore pretreatment workshop for crushing by truck, and the
crushed gavel is delivered to the existing ore washing workshop for ore washing,
thus recycling high-grade laterite adhered on the surface of gravel; -
350mm~+50mm gravel is used as the road stone, and -50mm~+3mm gravel and
saw dust residue are used as the reclamation fill of the goaf. The nickel recovery
rate in the ore slurry is 97.5%, and the cobalt recovery rate is 91.91%. The
concentration workshop concentrates into 20% ore slurry by using the high
efficiency concentrator, and the ore slurry is pumped to lone-distance ore slurry
pipeline transportation system.
Hydrometallurgy includes high pressure acid leaching, ore slurry
neutralization, CCD countercurrent washing, removal of iron and aluminum,
nickel and cobalt hydroxide precipitates by neutralization, obtaining the
intermediate product of nickel and cobalt hydroxide, and the tailing are
discharged to the deep-sea landfilling procedure for treatment upon neutralization.
For smelting recovery rate, the nickel is 89%, and the cobalt is 88%。
The final product of the Project is nickel and cobalt hydroxide. The nickel
price is calculated as per USD 12,000/t, and the cobalt price is calculated as per
USD 48,501/t. Combining the market sales in 2017, the nickel containing
valuation coefficient of nickel and cobalt hydroxide is considered as 75%, and the
cobalt containing valuation coefficient considered as 68%. Through estimation,
the Project has better economic benefits.
Reserves Estimation
Up to June 15, 2018, the lateritic NiCo ore reserves within all Ramu project
area(removal of consumed reserves) are 56Mt, Ni 0.9%, Co 0.1%; where
proved reserves are 24Mt, Ni 0.9%, Co 0.1%; probable resources are 33Mt, Ni
0.9%, Co 0.1%.
Category Ore
Reserve Average grade (%)
Remarks (Mt) Ni Co
Proved 24 0.9 0.1
Probable 33 0.9 0.1
Total 56 0.9 0.1 Notes:
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1.The Ni cut off grade is at 0.5%Ni, and the minimum mineable thickness is at 0.5m. 2.Totals may not equal the sum of the component parts due to rounding adjustments. 3.Ore tonnes (dry) represent the -2 mm economic portion of resource mineralization in the rocky saprolite 4.The QA/QC is not executed in the Productive Exploration in 2016, so 2016 exploration result is not included. 5.The resource and Ore reserves is updated on June 15th, 2018
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1. INTRODUCTION
1.1 Purpose and Task of the Project
NiCo Project, located in Madang Province, Papua New Guinea, is a world-
class mining project integrating mining, dressing and smelting. To promote
upgrading of resources, increase recoverable reserves, effectively prolong the
service life of mine, in 2016-2017, Ramu NiCo Management Limited carried out
intensive production exploration and peripheral complementary exploration within
the mining right. The resources and reserves in 2016-2017 within the scope of
work are estimated in this report according to the exploration work in 2016-2017,
in combination with the predecessor’s work in this area and according to the
requirements of the specification JORC (2012). The deadline of resources and
reserves estimation is June 15, 2018.
1.2 Field Investigation by Competent Person
The competent person Zhang Xueshu carried out investigation for field
drilling exploration, sample collection, processing and field laboratory on July 1-
6, 2017, and developed sample collection, processing and quality management
and quality control flow (QA/QC); the supervision work in other times was
executed by field supervisors based on QA/QC procedures audited by the
competent person under the supervision of the competent person. Zhang Xueshu
also review the mining and processing operating at Kurumbukari Basamuk during
visit the mining area.
Although the competent person Mr. Xiang GAO has not been to mine site,
but due to the mine has put into operation over five years since 2012, and open
pit mining was adopted with a conventional turck and excavator operating as well
as hydraulic mining within partial area. Mr GAO relied on the understanding and
finding during site visiting by Zhang Xueshu for the statement of ore reserve.
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1.3 Location and Traffic
Fig. 1-1 Geological Location of Mining Area
Ramu NiCo Project, located in Madang Province, Papua New Guinea,
consists of mine (including washery), smelting plant and 135km ore slurry pipeline
connecting the mine and the smelting plant. The mine is located in Kurumbukari,
75km from the southwest of Madang, the smelting plant is built along Basamuk
Bay, 55km from the southeast of Madang City, the mine is about 90km from the
smelting plant, and about 135km from the ore slurry pipeline. See Fig. 1-1 for the
traffic position.
Madang City is the provincial capital of Madang Province, located in the
northeast of Papua New Guinea. Madang City is connected with the port city Lae
by an expressway, called as Madang-Lae Expressway. From Brahman in the
middle of the expressway to Kurumbukari in the Ramu mining area, there is 60km
expressway connected in the mining area.
Madang City has scheduled domestic flights to and fro the capital Port
Moresby, where there are international flights flying to each major city of
Singapore and Australia. Madang and Lae nearer to the project location are both
provided with available port facilities, and materials and equipment transported
by sea will be transported to the location of the mine by highway.
1.4 Mining Right Setting
Exploration License (EL193) of Ramu NiCo Project covers an area of
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194.95km2, and the validity expires on February 26, 2018. Mining License (SML8)
covers an area of 54.4km2, and the validity expires on July 26, 2040. The drilling
exploration area within the scope of Mining License is about 25km2, consisting of
Kurumbukari area, western Ramu area, Great Ramu area, collectively known as
Ramu mining area (see Fig. 1-2). The area of the exploration range in 2016-2017
is about 7.9km2, and the specific range is as shown in Fig. 1-3.
Fig. 1-2 Location Map of Mining Rights (EL193 and SML8)
The prevailing unincorporated joint venture mode of international large
mining development project is used for Ramu Project. Three foreign shareholders:
MCC Ramu NiCo Management (MCC Ramu) Limited and the former project
developer Highlands Pacific Ltd., local companies on behalf of Papua New
Guinea and local land owners constitute the joint venture of Ramu Project. MCC
Ramu holds 85% shares of the Project, and other shareholders hold 15% shares
of the Project. Ramu NiCo Management (MCC) Limited (Ramu Management) is
jointly entrusted by shareholders of the joint venture to take charge of
construction, development and operation of the Project as the manager of the
joint venture.
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Fig. 1-3 Exploration Area in 2016-2017
1.5 Overview of Physical Geography
Papua New Guinea is located in the southwest of the Pacific, borders on
Irian Jaya, Indonesia in the west, and is separated from the Torres Strait, looking
at each other with Australia. The national population is 7,620,000 (2014),
including 98% Melanesians, others are Micronesians, ethnic Chinese and
Caucasians, etc. Papua New Guinea is a developing country with rich resources
and backward economy; the rural population accounts for 85%, and a
considerable portion of people have led a self-sustaining life of the primitive tribe.
The mineral resources, petroleum, fishery and cash crops are pillar industries of
Papua New Guinea economy. The gold, copper outputs are in front of world, and
the petroleum, natural gas are abundant. Main agricultural products are copra,
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cocoa beans, coffee, natural rubber and palm oil. The forest resources are rich,
and the tropical primeval forest covers an area of 330,000km2, accounting for
about 72.5% of the national territorial area; the total forest stock is about 5.2
billion m3, and the recoverable stock is 1.3 billion m3. In 2016, the GDP gross of
Papua New Guinea was USD 21.63 billion, and the per capita GDP was about
USD 2,704. The economic growth rate in 2017 was about 2.7%. The proportion
of industry in GDP in 2015 was 33.7%. The gross export of minerals in 2016 was
PGK 8.751 billion, accounting for 35.27% of the gross export.
The residents in the mining area are mainly Micronesians, living in different
tribes. The local economy is quite backward, and the main sources of residents’
income are to plant banana, sweet potato, cassava, maize and other crops, living
very hard. The industry of Madang Province is very undeveloped, and most
industrial products and daily living equipment depend on import.
The mining area belongs to inland, and the regional landform is relatively flat,
showing undulation, vividly called as “highland platform” by predecessors. The
average elevation is about 700, the gradient is 10~25°, vegetation is very
developed, and the coverage rate approaches 100%. The 2016-2017 prospective
exploration area is located beyond KBK, with steep terrain, relative height
difference of about 200m and gradient of 20~40°.
The east of the mining area is Ramu River, 100~200m wide, with higher river
discharge, running all the year round. The west of the mining area is Gagayo
River, which is the water source area of the mine, with lower river discharge in
dry season, so that the production water is intense.
Ramu mining area belongs to the tropical rainy climate, the dry season is
from every May to October, and the rainy season is from November to next April.
According to the observation data provided by KBK meteorological station in the
mining area, the meteorological data statistics in 2007 is as shown in Table 1-1.
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Table 1-1 Meteorological Data Statistics of Kurumbukari Mining Area in 2007
Maximum average temperature in rainy
season 27.6℃
Minimum average temperature in rainy
season 19.2℃
Maximum average temperature in dry
season 29.2℃
Minimum average temperature in dry
season 18.5℃
Annual maximum temperature
29.9℃ Annual minimum
temperature 18.1℃
Annual precipitation 6341mm Annual average
humidity 86.9%
Annual evaporation 1218 mm Prevailing wind
direction SSE (occurrence
frequency: 19.68%)
Maximum wind speed
2.5 m/s Annual mean wind
speed 1.4 m/s
2. GEOLOGY OF RAMU PROJECT
2.1 Regional Geological Background
The tectonic structure of Papua New Guinea is located in the joint part of
eurasian plate, Indo-Australian plates and the pacific plate. Since the Late
Cretaceous Epoch, Papua New Guinea has experienced a complex geological
tectonic evolution process in Papua New Guinea, and the convergence, collision,
subduction and decoupling, spreading and other geological processes of different
plates form the geological tectonic unit characterized by southern craton, central
Papua New Guinea orogenic belt and northern island-arc belt, producing
important mineral resources, such as porphyry type and epithermal hydrothermal
copper-gold deposit, lateritic nickel ore.
Ramu NiCo mining area is located on the northern margin of New Guinea
thrust fold zone in central New Guinea orogenic zone (Fig. 2-1). The outcrop in
this area is the Tertiary (N1) Marum basic-ultra basic rock zone (ophiolite
diamictite), which is the main ore source rock of lateritic nickel ore (Fig. 2-2).
The outcrop of Marum basic-ultra basic rock zone mainly includes two types
of magmatic rocks, i.e., (1) hypersthene gabbro, intercalated with a little gabbro,
vein-like anorthosite and gabbro pegmatite, distributed in the north and south. (2)
Ultra basic rock, including fresh dunite, serpentinite, pyroxenolite, as well as a
small amount of orthopyroxene peridotite and peridotite, distributed in the middle
part. The peridotite is distributed in some gabbros with auxiliary mineral chromite.
In addition, main strata outcropped in the north of the mining area are Pleistocene
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and Holocene river alluviums. Both banks of Ramu River are distributed with
Holocene river alluviums.
Fig. 2-1 Tectonic Unit of Papua New Guinea (□ is the location of the mining area)
Fig. 2-2 Regional Geological Map of Ramu NiCo Mining Area
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Fig. 2-3 Oxbow Lake Saw on the Aerial Photo of Ramu NiCo Mining Area
The laterite horizons containing Ni, Co in the mining area are distributed on
the dunite, orthopyroxene peridotite and peridotite of Marum ultra basic rock zone.
These sets of ultra basic rocks are distributed on a series of highland platforms,
forming the landform surrounded by faults to have horst characteristics. Marum
ultra basic rock zone is truncated by NW Bundi fault zone and Ramu-Markham
fault zone in the northeast and southwest, respectively. The fault throw of Ramu-
Markham fault reaches 400m. The highland platform in Ramu region is distributed
parallel to the above fault. Small structures can be found in some regions of the
mining area, such as shear fracture. They have slightly wavelike smooth
structural planes, on which there is obvious striation, adhered with mottling
chromite magnesite and kaolin; saprolitesubstances among gravels can be
observed to have squeezing, kneading, as well as diastrophism between dunite
gravel and saprolitesubstances. However, the structure is not developed in the
overlying ore-bearing horizon (i.e., Yellow limonite). It can be seen from the aerial
photo and the large scale topographic map that, multiple places of oxbow lake
(Fig. 2-3) are distributed on the first order terraces of both sides of Ramu modern
river bed; after entering the Quaternary Holocene Epoch, the erosion of river is
dominated by side erosion, and the plot is at the stage of descending relatively
Oxbow Lake
Oxbow Lake
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stably and slowly. It indicates that the fracture movement tends to be calm after
the Holocene Epoch.
2.2 Geology of Mining Area
2.2.1 Ultrabasic bedrock
The ultra basic rock in the mining area is occurred in form of bedrock, and
the joint in the rock is more developed; the anti-weathering ability is poor (Fig. 3-
1), which contributes to developing the weathering crust, consequently to form
the weathering crust deposit in this area. The rock type is dunite, locally
developed with a little augite peridotite, peridotite, etc. The rock is often grayish
green, yellowish green, medium-coarse grained, automorphic equigranular,
xenomorphic structure, massive structure, and the mineral is olivine, with the
content accounting for 85%~98%; the secondary mineral is serpentine, talc,
chromite, with the content of about 2%~15%.
The olivine is often yellowish green, hypautomorphic crystal long columnar,
short columnar, locally xenomorphic and irregularly granular, and the contact part
with the ore-bearing horizon is highly weathered; the rock is often of relic structure.
The talc is flake, fibrous aggregate, distributed on the edge of olivine,
between particles and in the crack; the serpentine is fibrous, micro-granular,
occurred in the crack; the chromite is automorphic or irregular aggregate,
distributed between olivine particles.
2.2.2 Laterite weathering crust
The laterite weathering crust exposed in the drilling engineering is divided
into: from top to bottom, Humic layer (Q), Red limonite (O), Yellow limonite (L),
Saprolite (S), upper rocky saprolite (R1) and lower rocky saprolite (R2).
(1) Humic layer (Q): black, dark brown, grayish brown, colloidal girdle
structure, earthy, loose structure. Plant roots can be found (Fig. 2-5). The main
constituent is clay, colloidal goethite, olivine fragment and sandy chromite, etc.
The goethite is occurred locally in form of girdle. The vegetation coverage rate of
the mining area is 100%, and it is distributed at the surface low-lying place of the
mining area, so the thickness is generally 0.2-1.05cm. The nickel content of this
horizon is 0.5% lower than the cutoff grade.
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Fig. 2-4 Schematic Diagram for Division of Ramu NiCo Weathering Crust Horizon
(2) The Red limonite (O): brownish red, maroon, loose, colloidal structure,
earthy, massive structure, and the main constituent is clay, goethite, olivine
fragment, chromite, talcs and gibbsite (Al(OH)3) and other minerals (Fig. 2-5),
which is the main cover of the mining area; the northern gradient of the sandstone
highway in the mining area is gentle relatively, distributed more widely, and
sporadically distributed in the south. The contents of Ni, Mg in this horizon are
low, the content is AL is greater than 5%, and the content of local Ni exceeds the
cutoff grade. It shows a gradual transition relation with the overlying Humic layer
and the underlaying Yellow limonite. The thickness of this horizon is generally
0.5-46.6m, and the average thickness is 4.37m.
Fig. 2-5 Humic layer and Red limonite
(3) Yellow limonite (L): grayish yellow, brownish yellow, brown, colloidal
structure, earthy, massive structure, a little raw rock weathering relic structure
occasionally found in the local part. The main constituent is clay, limonite,
goethite, and the secondary constituent is gibbsite Al(OH)3, talc, chalcedonite,
Humic Layer
Red limonite
Yellow limonite
Saprolite
Upper rocky Saprolite
Lower rocky Saprolite
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chromite and debris, etc. (Fig. 2-6).
This horizon is one of main ore-bearing horizons in the mining area, showing
a gradual transition relation with the underlying eluvium. It is also outcropped on
the mountain ridge of the mining area and the steeper slope section; the thickness
of this horizon is 0.3~19.05m, and the average thickness is 4.57m.
Fig. 2-6 Yellow limonite and Eluvium
(4) Saprolite(S): light greyish-green, brown, variegated, earthy loose
structure, earthy, massive structure, relic structure, micro-texture stratified
structure. This horizon consists of saprolite and clay. The saprolite content is 5%-
15%, and the main constituent is peridotite, secondary constituent is alterated
serpentine, chalcedonite, quartz, etc. The clay content is 95~85%, and the main
constituent is goethite, chromite, talc, gibbsite Al(OH)3, iddingsite, MuCo earth
ore, etc. (Fig. 2-7); this horizon basically contains no gravel. This horizon is
occasionally outcropped with a small area in the south of the sandstone highway,
having thickness of 0.4~13.35m and average thickness of 13.83m.
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Fig. 2-7 Saprolite with MnCo soil
(5) Rocky saprolite (R): The main feature of this horizon is peridotite
containing gravel. It is divided into upper rocky saprolite (R1, with gravel content
of less than 30%) and lower rocky saprolite (R2, with gravel content of greater
than 30%) according to the gravel content; the average gravel content of the
upper rocky saprolite (R1) is 17.22%, and the average gravel content of the lower
rocky saprolite (R2) is 51.20%.
1) Upper rocky saprolite (R1): light yellow, light brown, earthy structure,
brecciated structure, earthy, massive
structure. This horizon consists of gravel
and saprolite earth layer. The gravel
mainly consists of dunite, which is
angular, sub-angular, perfectly round,
with particle sizes of 5~50cm, irregularly
distributed, and gravel content of 4~30%.
The saprolite earth layer is of weathering
relic structure, earthy, massive structure,
micro-texture stratified, flaky structure.
Fig. 2-Fig. 8 are peridotite gravel in the
upper rocky saprolite, light green, smaller
particles.
This horizon is one of the main ore-
bearing horizons, outcropped in the north
Fig. 2-8 Dunite Gravel in the Upper
Rocky Saprolite
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of the mining area and the steep section in the south of the sandstone road, with
thickness of 0.4~21.20m and average thickness of 2.75m.
2) Lower rocky saprolite (R2): greyish green, light greyish green, light brown
iron stained locally, weathering relic structure, brecciated, earthy, massive
structure. This horizon is similar to the gravel-containing horizon, consisting of
gravel and saprolite earth layer, and only the content of gravel is different. The
rubble content in this horizon is greater than or equal to 30%, up to 91%
maximally; the particle size is of great disparity, generally 5~50cm, small to only
5~10cm; the rubble constituent is dunite, and the main mineral is olivine. The
olivine is automorphic or xenomorphic, and fine talc can be founded to be filled
along the cleavage or particles. The content of saprolite earth layer is lower than
that of the upper rocky saprolite, and its constituent is talc, serpentine, chromite,
goethite, followed by hydroxides of iron, etc. (Fig. 2-9). This horizon is one of the
ore-bearing horizons in the mining area, outcropped in the steep section in the
south of the mining area, with thickness of 0.30~13m and average thickness of
2.70m.
Fig. 2-9 Lower Rocky saprolite and Dunite Bedrock
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3. DEPOSITS TYPE
This deposit is typical lateritic NiCo ore formed by ultra basic rock after
weathering and leaching. When the ultra basic rock (dunite, peridotite) is subject
to strong weathering and leaching, the olivine, augite and other minerals rich in
Ni, Co and other useful elements are subject to oxygenolysis; the released SiO2
is taken away by underground (surface) water in form of colloid or silicic acid, and
the low valent iron is oxidized and converted into hydroxide and oxide (such as
lepidocrocite, goethite and hydrohematite) with high valent iron, left in situ. Nickel,
cobalt and other elements are fed into the solution in form of ion, absorbed by the
clay in the saprolite, or directly precipitated from the colloidal solution, or enriched
in form of secondary nickel silicate mineral, consequently to form weathering
(oxidization) crust lateritic nickel deposit.
4. MINERALIZATION
The laterite NiCo deposits in this area are occurred in the dunite weathering
crust. There weathering crust exposed in the drilling engineering includes 6
mineralization horizons: from top to bottom, Humic layer (Q), Red limonite (O),
Yellow limonite (L), Saprolite(S), upper rocky saprolite(R1) and lower rocky
saprolite (R2) (see Fig. 4-1). In the Humic layer, Ni<0.5%, belonging to the
mineralization horizon and not constituting the ore bed of industrial significance,
Red limonite Al≥5%, locally Ni≥0.5% containing ore, mostly containing no ore,
which is the main cover of the mining area. The Yellow limonite, eluvium, and
upper, lower gravel-bearing eluviums are the main ore-bearing horizons of this
area.
All ore beds are not varied a lot in thickness, not distributed uniformly, and
deficient in local sections. Ni, Mg, Co, Al, Mn, Sc, Fe and other elements in each
core bed are different in distribution, but the distribution still has a certain rule,
where the contents of Ni, Mg are gradually increased from top to bottom; to the
bottom of the lower gravel-bearing horizon, the content of Ni is reduced obviously,
and the content of Mg is gradually increased; the content of Al is reduced to the
increasing depth, and the contents of Co, Mn are slightly higher in the eluvium.
Table 4-1 Statistics for Ore Body Grade, Scale Parameter by Prospective Exploration in 2017
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Ore (bed) body
ID
Maximum burial
depth of ore body
(m)
Ore body thickness Grade of Ni Grade of Co
Average (m)
Maximum (m)
Coefficient of
variation
Average (%)
Coefficient of
variation
Average (%)
Coefficient of
variation
O 1.05 4.49 46.60 150% 0.558 36% 0.06 49%
L 46.60 4.65 19.05 72% 0.766 23% 0.087 41%
S 24.00 3.89 13.35 60% 0.826 23% 0.099 38%
R1 47.20 2.81 21.20 100% 0.767 29% 0.083 49%
R2 51.20 2.61 12.90 81% 0.778 26% 0.08 53%
Fig. 4-1 Profile of Ramu Laterite Weathering Crust
Generally dominated by topography and other factors, the plane form of ore
body is simple. The profile form of ore body is closely associated with topography
and landform. It occurs as stratified or lenticle beds. Moreover, it is essentially
consistent with the topography in the whole, with the dip angle as 10°~35°. The
form of ore body is strictly dominated by the ore-bearing horizons and exposed
by borehole. For this, most ore bodies will be missed. As a result of this, the ore
body occurs as discontinuous lenticle beds in profile. The dip angle of the bedrock
is 5°~35° generally, even may reach 45° at local section.
Ore bodies are hosted in the laterite above the dunite-based bedrock. Nickel
mainly occurs both in goethite and serpentine, but its grade is mostly 0.5~1%,
generally low. Industrial types of ores in this mining area are mainly divided by
contents of Mg and Ni in all ore-bearing horizons. Both their industrial types and
natural types belong to weathering crust lateritic NiCo ores.
Based on the MgO content, the weathering crust lateritic NiCo ore is divided
into: iron ore: MgO<10%; ferromagnesian ore: MgO: 10%~20%; magnesium ore:
MgO>20%. From the entire area, the contents of such impurity elements as Mg,
Al, Fe and Mn are generally low.
Yellow
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When the average content of MgO in the O, L and S (limonite bed) ore bodies
is less than 10%, it belongs to low-magnesium ore; when the average content of
MgO in the R1 (upper rocky saprolite) ore body is 18%, it belongs to iron ore;
when the average content of MgO in the R2 (lower rocky saprolite) ore body is
20.44%, it belongs to magnesium ore.
5. EXPLORATION
5.1 Geological Exploration Before 1999
Ramu nickel laterite deposit was found by Bureau of Mineral Resources of
Australia in 1962. Since then, the deposit has experienced the different degrees
of geological work borne by different corporations in multiple phases. As of 1999,
see Table 5-1 for geological exploration work carried out in and main exploration
quantities put into the mining area.
Depending on the work depths and achievements, Highlands Pacific Ltd.
(HGP), the former project developer, divided the exploration history Ramu project
before 1999 into four stages.
At the preliminary exploration stage between 1962 and 1970, the auger and
the exploratory trench (pit) are applied for prospecting. About 23km2 exploration
area is mainly finished by INSEL. CEC made an assessment on the mineral
deposit, and considered that further exploration work was needed based on the
market condition and technology at that time.
The first stage lasted from 1970 to 1982. CEC set up a joint venture with
EPML to develop Ramu laterite in 1971. As the joint venture manager, CEC
invested exploration for Ramu laterite. By virtue of applying the large density
sample and dressing and smelting test sample, the preliminary result was
obtained, and 69Mt ore resources were detected. The average grades of Ni and
Co were 1.29% and 0.105% respectively. CEC considered that the project was
not feasible at that time. In 1978, Nord joined development and exploration of the
project as the joint venture partner, and continued exploration for Ramu laterite
as the joint venture manager and executive. 129 test pits, 1,081 augers and 200
core drills were put into at the end of 1980. Later on, Nord also made an
assessment on chromite alluvial mineral deposit, through which the ore resource
was estimated as 4.1Mm3. On this basis, 60kg of chromite concentrate may be
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recovered per cubic meter averagely. With the ferrochromium ratio as 1.3:1 in the
concentrate and other elements, no further work is made for the mineral deposit
even if it has the exploration potential.
The second stage lasted from 1989 to 1990. For change of nickel market in
the world in 1989, Nord restarted exploration for Kurumbukari NiCo resources.
Meanwhile, HGP also purchased the shares of the joint venture project from CEC,
and put it into core drilling and auger boring. Located in the middle of Ramu, the
drilling engineering was directed to search resources with Ni grade greater than
1.5%. See Table 5-1 for the finished quantities. Through this prospecting, the
core drilling exploration grid reached 150m×150m, and the core drilling
exploration holes were densified and supplemented by the auger.
The third stage lasted from 1993 to 1994. HGP obtained 60% shares of the
Project in 1992, and PGK 5 million was invested for risk exploration. In 1993,
HGP started large-scale exploration, by which 56.5km was measured by the
geological radar and 10,200m was drilled. See Table 5-1 for the detailed
quantities. By this exploration, 24.2M t of total mineral resources was obtained,
average grades of Ni and Co were 0.90% and 0.08% respectively, and the cutoff
grade was 0.5%Ni. Besides, environmental monitoring and drilling, seismic
analysis, hydrologic survey, density sampling and drilling core re-sampling were
finished.
The fourth stage lasted from 1997 to 1999. To meet the feasibility research
requirement in 1997, the drilling engineering with the grid of 100m×100m was
started to confirm the grades of resources in Great Ramu Area. The grid covered
the extending parts in the middle, east and middle of Ramu, with area of 6.3km2.
See Table 5-1 for quantities finished till July 1998. In the meantime, 13 core drills
and 25 augers were constructed in the south of Ramu. When the drilling grid was
50m×50m in the local section, the grade change was determined by comparing
the areas with this grade with the area having the grade as 300m×300m. Besides,
two test pits were further constructed, by which the density sample and the
dressing and smelting test sample were applied.
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Table 5-1 Main Geological Survey workload in Ramu Mining Area Before 1999
Year
Corporation
1962 1963~1965 1965~1970 1970~1978 1978~1982 1989~1990 1993~1994 1997~1998.7 1999
BMR INSEL CEC EPML & CEC JV
Nord & CEC JV
HGP & Nord JV
HGP & Nord JV
HGP & Nord JV HGP & Nord JV
Auger (Nr.) 72 1098 60(406m) 25
Auger
(With hole coordinate)
70(528m)
Diamond drill (Nr.)
207 67(1160m) 414
10200m
660 13 88
PQ diamond drill 25(650m) 69
GPR (km) 56.5 29.9
Exploratory trench (pit)
115
39
Large exploratory trench (Nr.)
2 7(155m)
Pilot production (Nr.)
2
Remarks
The mineral deposit
was found.
Ore prospecting was carried out within the 23km2.
In retrospect of the previous jobs, it was considered that further exploration was needed on account that the exploration degree of the mineral deposit was sufficient.
The preliminary dressing and smelting test was finished by taking bulk sample.
Potential resources with grade greater than 1.5% in the middle were assessed.
Detailed resource assessment was finished.
100m×100m in the middle and 300m×300m in the eastern extension part. 50×50 grid in the middle was used for assessing change of the degree of mineralization.
Drilling exploration was started in the south.
When the west grid was 200m×200m, the geological radar with 1m resolution was implemented in the west.
6. Notes:BMR—Bureau of Mineral Resources; INSE—International Nickel Southern Exploration Ltd;CEC—Carpentaria Exploration Company;
EPML—Eastern Pacific Mines Ltd;Nord—Nord Resources Corp;HGP—Highlands Gold Properties Pty Ltd;JV—Joint Venture
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HGP put 88 core drills to the west of Ramu in 1999, so the control degree
of the west reached 200m×200m and 29.9km geological radar measured was
conducted.
5.2 Infill exploration
Since commencement of capital construction, Ramu NiCo Project has
successively carried out capital construction exploration for two phases,
respectively in 2013, 2015, 2016 and 2017, and conducted intensive
exploration for KBK area in the current working range and local peripheral
section.
1) First-stage construction exploration
Between April 2007 and December 2007, Sinomine Resource Exploration
Co., Ltd. carried out the first-stage construction exploration for the production
scope of the first year in the basic design of KBK area. All deposits were
systematically controlled by the 25m×25m drilling engineering spacing. The
finished main physical quantity included 0.48km2 of 1:500 topographic survey
and 0.28km2 of 1:500 topographic survey. 6,052.08m/450 holes were obtained
by core drilling. There were 4,577 basically analyzed samples. In the meantime,
Report on Capital Construction Exploration for Ramu NiCo KBK (A) Area in
Madang, Papua New Guinea was submitted in July 2009. Upon evaluation, in
the submitted report, the total ore resource was 200.88×104t, the Ni metal
content was 2.26×104t, and the Co metal content was 0.22×104t in the capital
construction exploration scope; the average Ni grade was 1.13% and the
average Co grade was 0.11%.
2) Second-stage construction exploration
Between September 2007 and May 2009, Sinomine Resource Exploration
Co., Ltd. carried out second-stage construction prospecting for KBK (B’) area.
Its exploration scope was determined by the basic design of the mine at the
second year. All deposits were systematically controlled by the 25m×25m
drilling engineering spacing. The finished main physical quantity included
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0.32km2 of 1:500 topographic survey and 0.36km2 of 1:500 topographic survey.
8,382m/549 holes were obtained by core drilling. There were 5,887 basically
analyzed samples. In the meantime, Report on Capital Construction Exploration
for Ramu NiCo KBK (B') Area in Madang, Papua New Guinea was submitted in
September 2009. Upon evaluation, in the submitted report, the total ore
resource was 316.61×104t, the Ni metal content was 3.15×104t, and the Co
metal content was 0.47×104t in the capital construction exploration scope; the
average Ni grade was 1.00% and the average Co grade was 0.15%.
3) Infill exploration in 2013
In 2013, the management corporation entrusted Hubei Geological Survey
Institute of Coal to explore the periphery of the capital construction exploration
area in KBK area, and submitted Instructions to Estimation on Peripheral
Resources/Reserves of Capital Construction Exploration Area in Ramu NiCo
KBK Area in Madang, Papua New Guinea on October 20, 2015. According to
the instructions, the detailed exploration area of KBK was 1.855km2, and the
exploration engineering spacing was 50m×50m; 780 boreholes were
constructed in the detailed exploration scope; through estimation on the total
resources in the detailed exploration area, the ore amount was 2,106.16×104t,
the Ni metal content was 20.67×104t, and Co metal content was 2.43×104t; the
average grades of Ni and Co were 0.98% and 0.115%, respectively.
4) Infill exploration in 2015
Between March 2015 and March 2016, Hubei Geological Survey Institute
of Coal performed productive exploration in the northeast of KBK area and local
areas of the adjacent Great Ramu Area. Between May 2015 and November
2015, 5,683.21m/490 holes were drilled, 4,561 basically analyzed samples
were collected, and the engineering spacing was 50m×50m. Also, 2015
Productive exploration Report on Ramu NiCo Project in Madang, Papua New
Guinea was submitted. Through estimation in the report, the total ore resource
was 320.48×104t, the average grade of Ni was 1.14%, and its metal content
was 3.64×104t; the average grade of Co was 0.11%, and its metal content was
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0.34×104t. In 2015, productive exploration went beyond the scope of KBK area,
mostly located in Great Ramu Area. The productive exploration scope beyond
the KBK area was about 0.66 km2.
5) Productive exploration in 2016
In 2016, the management corporation entrusted Hubei Geological Survey
Institute of Coal to carry out productive exploration for the south and north of
KBK area and local area of the adjacent Great Ramu Area, and submitted 2016
Productive exploration Report on Ramu NiCo Project in Madang, Papua New
Guinea in March, 2017. Based on the report, the productive exploration degree
area was 1.46km2; the area at the detailed exploration stage was 0.447km2,
and the prospective exploration area was 0.301km2. The exploration
engineering spacing was 50m×50m at the productive exploration stage,
100m×100m at the detailed exploration stage, and 200m×200m at the
prospective prospecting stage. Between June and November 2016,
9,729.28/668 holes were drilled, and 8,398 basically analyzed samples were
collected. It was estimated that the total ore resource was 1,868×104t, the
average grade of Ni was 1.03%, and the average grade of Co was 0.11%.
6) Infillexploration in 2017
A. Prospective exploration
In 2017, the management corporation entrusted Sinomine Resource
Exploration Co., Ltd. to carry out prospective exploration in the west side of
KBK area, and submitted 2017 Geological Exploration Report on Prospective
Area of Ramu NiCo in Madang, Papua New Guinea in May 2018. According to
the report, the exploration work area was located in the west side of KBK, with
the area as 4.1km2 and exploration engineering spacing as 100m×100m.
Between July 2017 and January 2018, 5125.02m/363 holes were drilled, and
4,606 basically analyzed samples were collected. Through estimation, the total
ore resource was 2,587×104t, the average grade of Ni was 0.744%, and its
metal content was 19.13×104t; the average grade of Co was 0.082%, and its
metal content was 2.14×104t.
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B. Productive exploration
In 2017, the management corporation entrusted Hubei Geological Survey
Institute of Coal to carry out productive exploration for the north side of KBK
area, and submitted 2017 Productive exploration Report on Ramu NiCo Project
in Madang, Papua New Guinea in May 2018. According to the report, the
exploration work area was located in the north side of KBK, with the area as
1.6km2 and exploration engineering spacing as 50m×50m. Between July 2017
and January 2018, 9,026.44m/702 holes were drilled, and 8,586 basically
analyzed samples were collected. Based on the report, it was estimated that
the total resource (ore reserve) was 1,225.15×104t, the average grade of Ni
was 0.943%, and the average grade of Co was 0.099%.
This estimation for work resources in exploration between 2016 and 2017
mainly involves a small amount of boreholes in “productive exploration in 2016”,
“productive exploration in 2017” and “geological exploration before 1999” within
the aforesaid scope of work.
6 TOPOGRAPHY AND ENGINEERING SURVEY
6.1 Productive exploration in 2016
RAMU93 coordinate system (independent coordinate system of the mining
area) was applied for the plane coordinate of the survey area, and RAMU93
elevation system (independent elevation system of the mining area) for
elevation.
1.06km2 of 1:1000 topographic survey was finished in the mining area, and
668 boreholes were surveyed.
Hi-Target Statistic GPS was applied for surveying the first-stage planar
control measurement in the mining area. For the mapping method of
topographic map of the mining area, the total station (TOPCON EOS602) was
applied for acquiring field topographic points, and the GASS7.1 mapping
software was applied for mapping indoors. RTK or total station was applied for
borehole survey.
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Surveying and mapping work meets the construction demands. It passed
Party A’s spot check for quality and the review for competent person.
6.2 Infill exploration in 2017
6.2.1 Prospective exploration
Both the coordinate system and the elevation system are consistent to
productive survey in 2016.
2.96km2 of 1:1000 topographic survey was finished, and the 363 boreholes
were surveyed.
Control points mapped in 2006 and 2013 were preserved well. Upon check,
plane and elevation precisions met demands of this survey. Mapping base
points were surveyed directly by virtue of GPS-RTK. If GPS-RTK cannot be
applied in the dense vegetation area, the total station polar method and the
connecting traverse method were applied. The field mapping method of total
station was applied in the dense vegetation area of the survey area, and GPS-
RTK field mapping method for the rest of areas. South CASS9.2 mapping
software was applied for mapping indoors. The total station was applied for
borehole survey.
Surveying and mapping work meets the requirements of design and
Chinese standards. It passed the Supervisor’s check for quality and the review
for competent person.
6.2.2 Productive exploration
The coordinate system, elevation system and survey method are
consistent to productive survey in 2016. 702 boreholes were surveyed.
Surveying and mapping work meets the requirements of design and
Chinese standards. It passed the Supervisor’s check for quality and the review
for competent person.
7 DRILL
7.1 Productive exploration in 2016
668 boreholes were constructed, with the different engineering spacing as
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50m~200m. Straight hole drilling was applied as the drilling method, and the
method of alloy drilling (mainly used for soil horizon construction at the upper
part of bedrock) and clad sheet drilling (mainly used for bedrock construction)
as the drilling technology. The borehole is of an open (final) hole with the
diameter of 94mm. Single tube was used for coring when the rock core was
recovered, with the coring diameter as 89mm.
The core recovery rates of all ore beds and full borehole core were required
to be no lower than 75.00%. The full borehole core recovery rates of the
constructed 668 boreholes were between 79.05% and 100.00%. The quality
essentially conformed to the regulation and design requirements.
The standard drilling rig was applied for this drilling exploration, so
borehole depth has no error. The quality met the requirements of the regulations.
Based on visual survey on the site, the drilling rig was straight and the borehole
depth was shallow, so no curvature test was conducted. Round trip water level
was not measured in boring construction in case of applying dry drilling or small
pump drilling. When drilling to the rocky saprolite, leakage was found in most
boreholes. For this, steady water level was not observed. However, the leakage
position in the borehole was recorded in the blank of the tour report. Boreholes
were landfilled with mineralized clay in the vicinity of the orifice for sealing.
Timber piles (marked with borehole number, borehole depth and construction
date, etc.) were buried in the orifice as the mark for drilling orifice.
Upon Party A’s site acceptance, it was believed that various technical
indicators of the drilling engineering conformed to the requirements of Chinese
drilling specification. The obtained results reached the expected geological
objective, the engineering quality was reliable, and the qualities of 668
constructed boreholes were qualified. The drilling quality was reviewed to be
qualified by the competent person.
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7.2 Infill exploration in 2017
7.2.1 Prospective exploration
This exploration object has a shallow burial depth and a thin ore bed. For
this, XY-1 drilling rig was applied for drilling construction. Drilling with short
round trip and small pump was applied to preventing the core from being
damaged in construction. Dry hole drilling was applied in soil horizon drilling;
when the rocky saprolite was drilled, gravels differed in size and solid
(peridotite). Small-pump water supply drilling was applied, and dry drilling was
applied to making sure core recovery rate when passing through the gravels. In
order to meet requirements of geological sampling and various analytical tests,
the drilling construction method of hard alloy drilling, accompanied by diamond
drilling was mainly applied in drilling exploration. The drilling structure involves
Φ110mm open hole and Φ91mm final hole. It was generally drilled to the
bedrock (about 1-2, fresh dunite was found) for finishing drilling hole. 363
boreholes was constructed in this exploration and totally qualified, with total
footage as 5,125.02m.
According to Party A’s requirements, the full-horizon recovery rates of Q,
O, L, S, R1 and B horizons were lower than 80%, and the full-horizon recovery
rate of R2 was no lower than 75%. The full-borehole recovery rates of 363
boreholes were between 85% and 100.00%. The average full-borehole
recovery rate was 94%, and the average recovery rates of the horizons were
87-98% (see Table 7-1), all of which met the regulation and design
requirements.
Table 7-1 Statistics of Recovery Rates of Strata
Stratum Design requirement (%) Recovery rate (%)
(Q) Humic layer 80 94
(O) red limonite bed 80 98
(L) yellow limonite bed 80 98
(S) saprolite 80 96
(R1) upper rocky saprolite 80 93
(R2) upper rocky saprolite 75 87
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Upon drilling, the depth of hole was corrected. The drilling rig was
measured by the steel tap, with reading accurate to two decimal places and the
hole depth error less than 1‰. It met the requirements of the regulations.
Boreholes of design construction were straight holes. Upon installation of the
drilling rig, the base was leveled. The two-side drop hammer method was
applied for correcting the vertical shaft to make sure the vertical shaft at 90
degrees. The axial lead of the vertical shaft of drilling rig, and the centers of
crown block and orifice were ensured on the same vertical line. All drilling
curvatures met the design requirements.
For the construction area located at the top of mountain body, dry drilling
was applied for the clay stratum which is aquiclude at the upper part in drilling
construction. Small-pump drilling was applied for the lower gravel stratum which
is leakage stratum, without backwater. No water level was found in the borehole.
Dry drilling position and leakage position in the borehole were recorded
accurately in the hydrogeologic observation content. Moreover, no water level
was found in all boreholes.
After drill-hole was finished, the boreholes were landfilled with mineralized
clay in the vicinity of the orifice for sealing. Timber piles were buried in the orifice
and red strips (marked with borehole number, borehole depth and construction
date, etc.) were bound as the marks for drilling orifice.
The Project Technical Engineer, Supervisor and Ground Survey Chamber
of Mine inspected the quality on the site once to twice a week. After construction,
Ground Survey Chamber of Mine and the Supervisor assumed that all
boreholes were controlled, top and bottom plates of the ore beds were disclosed,
various indexes and related parameters met the quality requirements of the
regulations and standards upon their inspection and acceptance. On this basis,
the geological objective was achieved, the engineering quality was reliable, and
363 constructed boreholes were qualified. The drilling quality was reviewed to
be qualified by the competent person.
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7.2.2 Productive exploration
702 boreholes were constructed, with most engineering spacing as 50m.
Drilling exploration is consistent to prospective exploration in 2017.
The Project Technical Engineer, Supervisor and Ground Survey Chamber
of Mine inspected the quality on the site once to twice a week. After construction,
Ground Survey Chamber of Mine and the Supervisor assumed that all
boreholes were controlled, top and bottom plates of the ore beds were disclosed,
various indexes and related parameters met the quality requirements of the
regulations and standards upon their inspection and acceptance. On this basis,
the geological objective was achieved, the engineering quality was reliable, and
702 constructed boreholes were qualified. The drilling quality was reviewed to
be qualified by the competent person.
8 SAMPLING AND LOGGING
8.1 CORE SAMPLING
8.1.1 Productive exploration in 2016
8,398 basically analyzed samples were collected from 668 boreholes.
(1) Sampling layout of chemical analysis sample
Sampling target stratum: full-section continuous sampling.
Sampling layout principles
Considering sample representatives and minable thicknesses of different
ores, the principle shall be met in sampling layout:
1) The same sample shall not go across different apertures;
2) The same sample shall not go across different rock and mineral beds;
3) The same sample shall not go across natural types and industrial
grades of different ores;
4) The true thickness represented by the single sample length shall not
exceed the industrially minable thickness of the mineral generally;
5) The same sample shall not go across the round trip with greater
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recovery rate difference.
(2) Layout of chemical sample section
In all recorded cores, chemical samples were deployed one by one based
on the aforesaid principle for the sample target stratum. The “Core Sample Sign”
(or sampling baffle plate) was filled and place into the bottom boundary of the
sample in the core. Meanwhile, sample number and well depth were recorded
in the geological record table. The chemical sample of the core was taken by
the designated sample man after being arranged by the geological logging
personnel.
(3) Sampling method
All holes are sampled continuously, with the basic sampling length as 1m.
When the distance between sampling point and the lamination position is no
more than 0.5m, combined sampling may be applied; separate sampling shall
be applied when the distance is greater than or equal to 0.5m. The sample
splitting knife is applied for 1/2 splitting the soil horizon for sampling as chemical
analysis, and the rest of 1/2 sample is discarded; the full-core sampling is
applied for the rocky saprolite.
After sampling is inspected and accepted by the Supervisor and Mine, its
quality meets the requirements of the regulations. The sampling quality was
reviewed to be qualified by the competent person.
8.1.2 Infill exploration in 2017
8.1.2.1 Prospective exploration
4,606 basically analyzed samples were collected from 363 boreholes.
(1) Sampling target stratum: full-section continuous sampling is made for
the ore bed (mineralization-bearing bed).
(2) Sampling layout principles
Samples shall be laid to meet continuous sampling on the basis of “Five
No-cross” for the same sample. That is: it does not exceed different ore beds,
different ores, different lithologic members and lithological characters, different
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apertures, and round trips with great round trip recovery rate difference.
(3) Sampling method
All holes are sampled continuously, with the basic sampling length as 1m.
When the distance between sampling point and the lamination position is no
more than 0.5m, combined sampling may be applied; separate sampling shall
be applied when the distance is greater than or equal to 0.5m. 1/2 split core
sampling was applied for the soil horizon for chemical analysis, and the rest of
1/2 was discarded (except for core reserved drilling); full-core sampling was
applied for the upper and lower gravel-bearing horizons.
After the sample was packaged into the self-sealed plastic bag, the sample
label was filled accurately and clearly corresponding to the sampling register
form, and then sealed with the adhesive tape, and finally packaged into the
corresponding sample bag after check without error. Every 6-8 samples were
packaged into one woven bags. The exterior of each woven bag were marked
with borehole number and sample number with permanent pen. The woven
bags were transported to the sampling room by the drilling rig unit.
After sampling is inspected and accepted by the Supervisor and Mine, its
quality meets the requirements of the regulations. The sampling quality was
reviewed to be qualified by the competent person.
8.1.2.2 Productive exploration
8,347 basically analyzed samples (inclusive of 239 blank samples) were
collected from 702 boreholes.
The sampling method is consistent with the productive exploration in 2017.
After sampling is inspected and accepted by the Supervisor and Mine, its
quality meets the requirements of the regulations. The sampling quality was
reviewed to be qualified by the competent person.
8.2 CORE LOGGING
8.2.1 Productive exploration in 2016
Drilling and recording were conducted when drilling construction was
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conducted. The recording location is in the drilling construction site, and the
recording time is before the core fails to be denuded and weathered after being
taken from the borehole.
Recording contents mainly include inspection for drilling exploration tour
report, core sorting and inspection, round trip data record, core photographing,
lithology lamination, geological description, etc.
Drilling record data were bound in a volume after check and correction as
well as sorting and improvement. The borehole bar chart with scale of 1:100
was drawn in a format of CAD2004 in the computer.
All drilling data were inspected and accepted by the Supervisor and Mine,
and the quality met the requirements of the regulations. The recording quality
was reviewed to be qualified by the competent person.
8.2.2 Infill exploration in 2017
8.2.2.1 Prospective exploration
The geological record shall execute the related Chinese specifications.
After the drill hole was finished, the geologist arrived at the site for
geological recording promptly. Recording contents mainly include: 1) inspection
for drilling exploration tour report and core; 2) observation and record: core
lamination and photographing, round trip data record, geological description,
etc.
The drilling record data was bound in a volume upon inspection and check
as well as sorting and improved; the related data about original geological
record, sampling and sample processing was recorded into borehole database
for further statistical analysis, drawing and modeling whenever possible.
All 363 drilling data were inspected and accepted by the Supervisor and
Mine, and the quality met the requirements of the regulations. The recording
quality was reviewed to be qualified by the competent person.
8.2.2.2 Productive exploration
The drilling record is consistent to prospective exploration in 2017.
All 702 drilling data were inspected and accepted by the Supervisor and
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Mine, and the quality met the requirements of the regulations. The recording
quality was reviewed to be qualified by the competent person.
9 SAMPLE PREPARATION, ANALYSES AND
SECURITY
9.1 Sample Preparation
9.1.1 Productive exploration in 2016
Chemical analysis sample shall be prepared in accordance with the
requirements of Specification of Testing Quality Management for Geological
Laboratories - 13 Preparation Procedures of Rock-Mineral Analysis Test
Sample (DZ0130.13-94). Sample processing is divided into preliminary
crushing and fine crushing. Every stage also includes crushing, screening,
uniformly mixing and splitting.
This sample preparation was carried out in the built sample processing
room. After the Sample Processing Chamber received the sample, the number
of samples was checked by contrasting the sample list to confirm sample
amount and sample number to be consist to the sample list, and then sample
was processed. Sample processing procedures are as follows:
(1) Sample loading and weighing: after all samples of the same borehole
are arranged in sequence, and then the samples are sequentially poured into
the sample tray for weighing and recording based on the sample numbers.
When the samples are poured, the sample labels in the sample tray are
inspected carefully to prevent the sample numbers from being gone wrong. In
case of any problem on the sample label, the sample is sealed promptly, and
then checked with the logging personnel and sampler, and finally weighed
again when no error is ensured for the sample number. The sample tray is
frequently washed to keep clean, so as to prevent cross contamination of the
sample.
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(2) Sample drying: wet samples are dried for 4-6h after being weighed, in
order to shorten the sample processing time. It is required to strive for
stabilization of the dried samples in the course of going in and out of the oven,
so as to prevent the samples from scattering. Samples are generally dried for
10h at 95°C. When samples are totally dried (constant weight), dry weights of
samples are weighed and recorded.
(3) Sample rolling: gravel-free Red limonite, Yellow limonite and
saprolitesamples are broken with wooden rolling pin. The preliminarily sample
has a particle size of 16-20 meshes (1mm-0.83mm). The rocky saprolite sample
is rolled after the sample is washed and dried.
(4) Sample splitting: splitting is carried out after the particle size of sample
meets the requirements. Samples are mixed for no less than three times before
splitting, so as to try to make sure uniformity coefficient of the sample. The
quarter diagonal method is applied for splitting. When the samples are
excessive, the quarter diagonal method is used for secondary splitting again till
the total weight of soil sample is about 400g. For sample splitting, the
processing flow is prepared by the chechott formula, in which the splitting
coefficient is K value, generally 0.1. The chechott formula is Q=Kd2.
In which, Q-minimum reliable quality of the sample, kg; d - maximum
crushing particle diameter of the sample, mm; K - splitting coefficient
determined by the characteristics of the rock and mineral sample.
(5) Sample crushing: The split sample is put into the sample grinder to be
ground into -200 meshes, and then split into original and duplicate samples.
The sample of every part is about 100g. Then, the two samples are respectively
packaged into the paper sample bags, and the surplus samples are abandoned
to the raw material yard of the ore-washing plant.
(6) Gravel-containing sample processing: all rocky saprolite samples are
processed. Its processing procedure is as follows: A. after the sample is dried
and weighed, the wooden rolling pin is used for breaking the sample, and then
the obvious gravels are selected for separate storage. B. The rolled samples
Mineral Resource & Ore Reserve Estimate in 2017 Ramu NiCo Management (MCC) Limited
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are screened by 2mm sieve; the undersize samples are stored separately; the
oversize gravel samples and the gravels in process A are mixed together. C.
Soil adhered to the gravels are brushed with the steel wire brush, and then all
samples are screened with the -2mm sieve. D. Samples with particle size of
below 2mm in the process C are included into the samples separately stored in
the process B, and then the fully and uniformly mixed samples are crushed and
splitted. Gravels in process C are discarded after being weighed and recorded.
(7) Data sorting: wet and dry weights of samples and weight of gravels are
recorded in sample processing, and the data is sorted into the electric file; after
moisture content of the sample and weight percentage of travel are calculated,
he data is provided to Party A on schedule.
(8) Sample delivery: original and duplicate samples with maximum particle
size of -200 mesh through processing are handed over to the testing laboratory
of Party A’s Project Department of the mine promptly together with the sample
delivery list once a week.
The processing method is approved by the mine, and its quality complies
with the requirements of regulations upon the mine’s inspection and acceptance.
The processing quality was reviewed to be qualified by the competent person.
9.1.2 In-fill exploration in 2017
9.1.2.1 Prospective exploration
(1) Basic requirements for sample preparation
1) This sample processing refers to drying, crushing and splitting of core
sample, blank sample and replicate sample. All samples shall be delivered to
Ground Survey Chamber of Mine in batches. The specifications of every
sample shall be as follows: the original sample with granularity of 200 meshes
is 50~100g, and the duplicate sample is 130g.
2) The room of sampling chamber shall be provided by the mine. Main
sampling equipment shall include jaw crusher, sampling machine, thermostatic
drier box, vibrating screen, vacuum pump, etc.
3) The total loss rate of entire sample processing shall be no more than
Mineral Resource & Ore Reserve Estimate in 2017 Ramu NiCo Management (MCC) Limited
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5%, and the splitting error of the sample shall be no more than 3%.
(2) Sample processing flow
Chemical analysis samples shall be prepared in accordance with the
requirements of Specification of Testing Quality Management for Geological
Laboratories - 13 Preparation Procedures of Rock-Mineral Analysis Test
Sample (DZ0130.13-94). Sample processing is divided into coarse crushing
and fine crushing. Every stage also includes crushing, screening, uniformly
mixing and splitting.
1) After the sampling chamber receives the sample, the quantities and
numbers of samples shall be checked by contrasting the sample list, and then
samples are processed upon confirmation.
2) Sample loading and weighing: after all samples of the same borehole
are arranged in sequence, and then the samples are sequentially poured into
the sample tray for weighing and recording based on the sample numbers.
When the samples are poured, the sample labels in the sample tray are
inspected carefully for confirmation. Samples having problems in labeling shall
be sealed up for safekeeping, and shall be verified with logging personnel and
sampling personnel. When there is no error for sample No., the procedure of
weighing shall be conducted. To prevent the cross contamination of samples,
sample pan shall be cleaned up for use without cross infection after weighted
every time.
3) Sample drying: Gloves shall be put on to put samples in and take out
samples from the stove, steadily without spilling. Samples shall be baked for
12h under the temperature of 95~105°C. When samples are totally dried
(constant weight), dry weight of samples shall be weighed and recorded.
4) Coarse crushing of samples: Coarse crushing shall be conducted
directly for samples containing no gravel from Red limonite, yellow limonite
layer and eluvium. Coarse crushing can be carried out after gravel-containing
samples from saproliteare washed, processed and dried. Before and after the
coarse crushing of each sample, alligator crusher shall be cleaned up without
Mineral Resource & Ore Reserve Estimate in 2017 Ramu NiCo Management (MCC) Limited
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cross infection. The particle size of samples after coarse crushing shall be 16
mesh~20 mesh (1mm~0.83mm).
5) Sample crushing: After coarse crushing and splitting of samples,
original samples shall be put in the grinding machine and ground to -200 mesh.
The rest of residual samples shall be discarded to a specific place.
6) Sample splitting: Splitting mass of samples shall be calculated
according to Qeqott formula as follows:
Where: Q - minimum reliable mass obtained when splitting (kg)
K - splitting coefficient, taking (0.1~0.3) generally
d - maximum particle size of pulverized samples (mm)
Splitting of sample coarse crushing: K takes the value of 0.2; d takes the
value of 1mm~0.83mm; Q is calculated as around 400g.
Splitting of sample crushing: K takes the value of 0.2; d takes the value of
0.074mm; Q is calculated as around 100g.
Splitting ration is estimated according to the weight of samples and
calculated reliable mass of Q splitting.
Automatic splitter is employed for all samples to complete splitting one time.
7) Processing of gravel-containing samples: The processing method is the
same as that of productive exploration in 2016.
8) After samples are crushed to 200 mesh, original samples with about
50~100g shall be packed fractionally while duplicate sample with about 130g
shall be packed fractionally. Redundant samples shall be discarded to a specific
place.
9) Blank sample: Original samples are the limestone debris provided by
Ground Survey Chamber of Mine in batches. Samples shall be mixed with the
same batch of sample No. before processing. The weight of a single blank
sample is greater than 400g with the granularity of 1~6mm. After crushed to
200 mesh, 100g shall be taken to be packed and handed with the same batch
2dKQ =
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of core samples. According to the calculation of three processed blank samples
for each 100 core samples, the core samples are 4,606 in total for this time,
154 blank samples shall be prepared, 159 pieces are transferred actually, so
the design work amount is completed successfully.
(3) Organization of data
During sample processing, wet weight and dry weight of samples and
weight of gravel shall be recorded at any time. Relevant data of processed
samples on the current day shall be organized as an electronic file, and the
percentage of moisture content of samples and weight percentage of gravel
shall be calculated. Data shall be provided to the Ground Survey Chamber of
Mine in time.
(4) Transfer of samples
With respect to original samples (50~100g) and duplicate samples (130g)
obtained after 200 mesh crushing and splitting, one batch of samples shall be
transferred to the Ground Survey Chamber of Mine every week, 18 batches in
total, 4,765 pieces (including 159 blank samples). After samples are checked
and accepted by the Supervisor and the appointed person of the Ground
Survey Chamber, a sample handover list shall be signed, then samples can be
send to the testing laboratory by the Ground Survey Chamber.
(5) Quality inspection of sample preparation
The quality of sample preparation shall be inspected according to the
requirement of Specification of Testing Quality Management for Geological
Laboratories - 13 Preparation Procedure for Rock Ore Analysis Sample (DZ/T
0130-2006).
Sample loss rate during preparation: According to the statistics, the loss
rate of sample preparation for this time is smaller than 5%, and the qualification
rate is 100%.
Splitting error of sample preparation: According to the statistics, the
splitting error for this time is smaller than 3%, and the qualification rate is 100%.
The processing method is recognized by the mine, checked and accepted
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by the Supervisor and the mine. Its quality complies with the requirement of
specifications. The processing quality was reviewed to be qualified by the
competent person.
9.1.2.2 Productive exploration
Sample processing is consistent with the prospective exploration in 2017.
Core samples are 8,347 in total for this time, and 239 blank samples are
prepared, so the design work amount is completed successfully. One batch of
samples shall be transferred to the Ground Survey Chamber of Mine every
week, 8,586 pieces in total (including 239 blank samples).
The processing method is recognized by the mine, checked and accepted
by the Supervisor and the mine. Its quality complies with the requirement of
specifications. The processing quality was reviewed to be qualified by the
competent person.
9.2 Sample Analysis and Test
9.2.1 Productive exploration in 2016
(1) Measurement of density
500 samples from 668 boreholes are collected for small density test. Small
density samples shall be laid as construction progress according to the design
borehole, 100 pieces shall be taken from layers of O, L, S, R1 and R2
respectively. Weight shall be measured during the sample processing.
Small density samples are 1m-long regular soil samples with the total core
recovery of 100%, and the diameter of core is 7cm, so the volume of samples
is 3,846.5cm³ through calculation and the weight is measured by an electronic
scale. In this way, design requirements are met and test purpose is reached.
The calculation formula for wet density is as follows:
Where: P0 - wet density of sample (g/cm3)
m0 - mass of wet soil sample (g)
V - volume of sample 3,846.5 (cm3)
V
mP 0
0 =
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The calculation formula for dry density is as follows:
Where: Pd - dry density of sample (g/cm3)
W0 - moisture content of sample (water/dry soil) %
Density shall be measured through parallel determination twice. The
difference of these two measurements shall be no greater than 0.03g/cm3, the
mean value shall be taken.
(2) Measurement of humidity
The specification of Standard for Soil Test Method (GB/T50123-1999) shall
be applied for the measurement of sample humidity (moisture content).
The calculation formula for moisture content is as follows:
Where: W - moisture content of sample (%)
m0 - mass of wet soil sample (g)
md - mass of wet soil sample (g)
Humidity shall be measured through parallel determination twice. When
moisture content is smaller than 40%, the difference of these two
measurements shall take 1%, while if moisture content is greater than 40%, the
difference shall take 2%, then the mean value shall be taken.
(3) Measurement of gravel content
Test procedure: First, weigh the samples, pick out large gravel, place the
remaining samples on rubber plate and grind them with an iron mill, brush off
the mud on large gravel with a wire brush, and weigh the samples in the sieve
and under the sieve after sieving from a 2mm sieve; use a 2mm water sieve to
sieve samples in the sieve and gravel picked out, put samples in 95°C oven
and bake for 10h, and weigh the samples and gravel with an electronic scale.
The volume of gravel is calculated through the known density of gravel
0
0
W1+=
PPd
100)(0
0 −
=m
mmW d
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(3.086 g/cm3), and the calculation formula for the gravel volume content is as
follows:
V
VV 0
content =
V content - gravel volume content %
V - volume of sample 3,846.5 (cm3)
V0 - volume of gravel sample (cm3)
V0=M0/Pgravel
M0 - weight of gravel (g)
Pgravel - density of gravel (3.086 g/cm3)
(4) Chemical analysis of samples
The basic analysis items of chemical samples shall be determined by KBK
testing laboratory of the mine. Analytical elements include Ni, Co, Mg, Al, Fe,
Mn and Sc. According to the introduction of the laboratory of the mine, test
samples are dissolved by hydrochloric acid, nitric acid, hydrofluoric acid, and
perchloric acid. In the nitric acid medium, inductive coupling and other plasma
emission spectrometers (Varian 700-ES) are used to measure the mass
concentration. The measured scope of NiCo for the method is 0.02~10.0%,
which satisfies the production need of the mine. According to the data of the
mine, detection limit Ni of Varian 700-ES instrument is 5.0μg/L and Co is
13.0μg/L. This meets the need of the test method.
Sample test analysis is checked and accepted by the mine, and the quality
meets the production requirement. Upon the examination of competent persons,
the test quality of samples is qualified.
9.2.2 Infill exploration in 2017
9.2.2.1 Prospective exploration
(1) Measurement of density
The test method is consistent with the productive exploration in 2016.
(2) Measurement of humidity
The test method is consistent with the productive exploration in 2016.
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(3) Measurement of gravel content
According to the design requirements, the weight of 398 pieces of gravel
from all samples of gravel-containing layer is measured. Gravel volume content
is calculated for 139 small weight samples.
The test method is consistent with the productive exploration in 2016.
(4) Chemical analysis of samples
All sample analysis this time shall be tested by the testing laboratory of the
mine. The test method is the same as the productive exploration in 2016. Basic
analysis items: Ni, Co, Mg, Al, Fe, Mn and Sc. 5,120 pieces in total.
4,606 core samples, 159 blank samples, 95 high grade standard samples,
65 low grade standard samples and 195 replicate samples are included.
Composite analysis items: The Ground Survey Chamber of Mine makes
composite sample analysis on Red limonite (O), Yellow limonite (L), Saprolite
(S), and rocky saprolite R1 and R2 according to the need. Analysis element is
Cr for 208 pieces in total.
Sample test analysis is checked and accepted by the Supervisor and the
mine, and the quality meets the production requirement. Upon the examination
of competent persons, the test quality of samples is qualified.
9.2.2.2 Productive exploration
(1) Measurement of density
The test method is the same as the productive exploration in 2016.
(2) Measurement of humidity
The test method is the same as the productive exploration in 2016.
(3) Measurement of gravel content
The test method is the same as the productive exploration in 2016.
(4) Chemical analysis of samples
All sample analysis this time shall be tested by the testing laboratory of the
mine. The test method is the same as the productive exploration in 2016. Basic
analysis items: Ni, Co, Mg, Al, Fe, Mn and Sc.
Sample test analysis is checked and accepted by the Supervisor and the
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mine, and the quality meets the production requirement. Upon the examination
of competent persons, the test quality of samples is qualified.
9.3 QA/QC
9.3.1 Productive exploration in 2016
QA/QC procedure is not executed
9.3.2 Intensive exploration in 2017
9.3.2.1 Prospective exploration
QA/QC procedure for the assay analysis includes replicate samples,
standard samples and blank samples without external quality inspection.
Replicate samples are from -200 mesh duplicate samples of the same
basically analyzed samples, standard samples are from duplicate samples of
production prospecting core basic analysis samples in 2016, and blank samples
are from the limestone mine of Basamuk smelting plant. The Ground Survey
Chamber of Mine shall be responsible for insertion method, quantity and
inspection of replicate samples, standard samples and blank samples.
(1) Insertion method of quality control sample
1) The insertion quantity for every 100 samples shall be:
① 92 pieces shall be inserted in 2 high grade standard material samples,
while 150 pieces are inserted actually;
② 46 pieces shall be inserted in 1 low grade standard material sample,
while 80 pieces are inserted actually;
③ 46 pieces shall be inserted in 1 power replicate sample, while 148
pieces are inserted actually;
④ 138 pieces shall be inserted in 3 blank samples, while 116 pieces are
inserted actually;
2) Among 100 samples, 10 sample Nos. shall be kept: any sample with
the tail number of 0 shall be kept for the use of quality control samples.
3) Sample Nos. above shall be marked through folding for the avoidance
of omission or misuse;
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4) There shall be over 40 samples at least between No. location of
replicate samples and that of original samples. These samples shall be put in
different test batches as possible.
5) Replicate samples and standard samples shall be inserted during or
after the sample processing. There shall be a clear process to direct how to
insert quality control samples during sample processing in the laboratory;
6) Standard samples, replicate samples and blank samples shall be
numbered for the test procedure.
7) Among every 100 samples, quality control samples have their own
specific locations, which are managed by technicians who are responsible for
sample insertion.
8) Nobody shall know the grade of objective elements in standard
materials except sample insertion geologist.
(2) Quality inspection of replicate samples
148 replicate samples are inserted in 3rd-17th batches, with 140 effective
samples.
The qualification rate of assay results shall be determined through
comparing the allowable limit of relative deviation (Yc) and relative deviation
(RD) of assay results. The exact calculation formula is as follows:
Where:
Yc - allowable limit of relative deviation (%);
C - allowable coefficient of relative deviation; Ni and Co are 0.67; Mg, Al,
Fe, Mn and Sc are 1.00.
- Mean mass fraction of original samples and replicate samples (%).
Where:
RD - relative deviation (%)
)659.737.14(1263.0
−=−
XCYc
X
X
XXiRD
−=
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Xi - measured mass fraction of replicate samples (%)
- Mean mass fraction of original sample and replicate samples (%)
That the allowable limit of relative deviation (Yc) for replicate samples is
greater than and equal to relative deviation (RD) is deemed as qualified,
otherwise it shall be deemed as unqualified. See Table 9-1 and Figs. 9-1 and
9-2 below for calculated statistical results. The qualification rate of Ni is 96.43%;
that for Co is 94.29%; that for Mn is 97.14%. It is shown through results that the
analytical precision complies with the requirement of specifications, the
qualification rate of other elements is low and precision of analysis results
complies with Party A’s requirement.
Table 9-1 Statistical Table for Analysis Quality Inspection of Replicate Samples
Analysis item Ni Co Mg Al Fe Mn Sc
Quantity of qualified samples 135 132 74 129 113 136 56
Quantity of effective random
samples
140 140 140 140 140 140 140
Qualification rate (%) 96.43 94.29 52.86 92.14 80.71 97.14 40.00
Fig. 9-1 Comparison for the Grade of Ni in Replicate Samples and Original Samples
X
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2
1 8
15
22
29
36
43
50
57
64
71
78
85
92
99
10
6
11
3
12
0
12
7
13
4
Ni g
rad
e(
%)
Samples
Original
Replicate
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Fig. 9-2 Comparison for the Grade of Co in Replicate Samples and Original Samples
(3) Quality inspection of standard samples
150 high grade standard samples are inserted in 3rd-17th batches, with 71
effective samples. 50 low grade standard samples and 40 effective samples are
included.
The qualification rate of assay results shall be determined through
comparing the allowable limit of relative deviation (YB) and relative error (RE)
of assay results. The exact calculation formula is as follows:
Where:
YB - allowable limit of relative deviation (%);
C - allowable coefficient of relative deviation; Ni and Co are 0.67; Mg,
Al, Fe, Mn and Sc are 1.00.
XT - standard value of standard material (%).
Where:
RE - relative error (%)
Xi - measured mass fraction of standard samples (%)
XT - truth-value mass fraction of standard samples (%)
That the allowable limit of relative deviation (YB) for standard samples is
greater than and equal to relative error (RE) is deemed as qualified, otherwise
0.001
0.010
0.100
1.000
1 8
15
22
29
36
43
50
57
64
71
78
85
92
99
10
6
11
3
12
0
12
7
13
4
Co
gra
de
(%)
Samples
Original
Replicate
)659.737.14(2
1 1263.0−=
−
TB XCY
T
T
X
XXiRE
−=
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it shall be deemed as unqualified. See Tables 9-2 and 9-3 below for calculated
statistical results.
Table 9-2 Statistical Table for Accuracy Quality Inspection of High Grade
(Ni>1.05%) Standard Samples
Analysis item Ni Co Mg Al Fe Mn Sc
Quantity of qualified
samples
32 57 6 36 12 48 12
Quantity of effective
random samples
71 71 71 71 71 71 71
Qualification rate (%) 45.07 80.28 8.45 50.70 16.90 67.61 16.90
Table 9-3 Statistical Table for Accuracy Quality Inspection of Low Grade (Ni<0.6%)
Standard Samples
Analysis item Ni Co Mg Al Fe Mn Sc
Quantity of qualified
samples
21 16 3 1 8 23 0
Quantity of effective
random samples
40 40 40 40 40 40 40
Qualification rate (%) 52.50 40.00 7.50 2.50 20.00 57.50 0.00
It can be seen from the table above that the accuracy of the analysis results
is low, so it doesn’t comply with the requirement of specifications. It is though
through the research and analysis that standard samples inserted for the assay
are basic analysis duplicate samples of productive exploration cores in 2016.
These standard samples are not national ones. So the verification of accuracy
is only for reference and shall not be used as basis for assessment.
(4) Blank samples
116 blank samples (112 effective samples) are inserted in 3rd-17th batches
for this assay, so as to inspect if there is cross contamination of samples during
the process of sample preparation. Blank samples are from the limestone mine
of Basamuk smelting plant.
The test method used by the testing laboratory is: test samples are
dissolved by hydrochloric acid, nitric acid, hydrofluoric acid, and perchloric acid.
In the nitric acid medium, inductive coupling and other plasma emission
spectrometers (Varian 700-ES) are used to measure the mass concentration.
The measured scope of NiCo for the method is 0.02~10.0%, which satisfies the
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production need of the mine. According to the data of the mine, detection limit
Ni of Varian 700-ES instrument is 5.0μg/L and Co is 13.0μg/L. This meets the
need of the test method.
The grade of Ni for the blank sample is ≤0.02% (Fig. 9-3), and grade of Co
is ≤0.004% (Fig. 9-4). It is shown that blank samples are free of cross
contamination during the process of preparation, so the quality of sample
preparation meets the requirement of specifications and design.
Fig. 9-3 Distribution for the Grade of Ni of
Blank Samples
Fig. 9-4 Distribution for the Grade of Co of
Blank Samples
QA/QC procedure is executed during the exploration, but part of
procedures is not less standard. The test results of samples can meet the
production need of the mine.
9.3.2.2 Productive exploration
QA/QC procedure is consistent with the peripheral exploration in 2017, and
the test results of samples can meet the production need of the mine.
9.4 Sample Security
9.4.1 Productive exploration in 2016
Hubei Geological Survey Institute of Coal shall take care of samples during
the sample collection and processing. Original and duplicate samples with
maximum particle size of -200 mesh through processing shall be handed over
to the testing laboratory of the Project Department of the mine in time together
with the sample delivery list once a week.
Exploratory boring cores shall be abandoned after split-core samples are
0.000
0.005
0.010
0.015
0.020
0.025
0 20 40 60 80 100 120
Ni
grad
e (
%)
Samples
0.000
0.001
0.002
0.003
0.004
0.005
0 20 40 60 80 100 120
Co
gra
de (
%)
Samples
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collected.
9.4.2 Infill exploration in 2017
9.4.2.1 Prospective exploration
Sinomine Resource Exploration Co., Ltd. takes care samples during the
sample collection and preparation. With respect to original (50-100g) and
duplicate samples (130g) obtained after 200 mesh crushing and splitting, one
batch of samples shall be transferred to the Ground Survey Chamber of Mine
every week, 18 batches in total, 4,765 pieces (including 159 blank samples).
After samples are checked and accepted by the Supervisor and the appointed
person of the Ground Survey Chamber, a sample handover list shall be signed,
then samples can be send to the testing laboratory by the Ground Survey
Chamber. Duplicate samples shall be kept by the laboratory. Upon the
examination of competent persons, the storage quality of samples is qualified.
Spacing of 200m among the holes is required for preserving cores at an
early stage, while the Supervisor and the Ground Survey Chamber discuss and
determine to use the spacing of 400m at a later stage due to the increasing
difficult in construction and the consideration of safety. Core preservation refers
that the remaining cores after sampling are transferred to the core library for
proper storage. Borehole roundtrip tickets for core preservation is sealed with
tape, labels of the samples are placed in empty slot of full-core sampling, and
borehole No., Ctn. No. of preservation as well as core depth are marked on
both sides of core box. Core storage form shall be drawn up after cores are put
in storage, recording Ctn. No. of borehole cores, hole depth and storage date.
Core retention transfer form shall be drawn up in batches. After checked by the
Supervisor and Ground Survey Chamber of Mine, it shall be handed over to the
Ground Survey Chamber of Mine. There are 82 boreholes preserved this time,
270 boxes in total. All cores have been handed over to the place specified by
Party A, and accepted by Party A and the Supervisor. The quality complies with
the design requirement. Upon the examination of competent persons, the
storage quality of cores is qualified.
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9.4.2.2 Productive exploration
Sample and core storage procedure is consistent with the peripheral
exploration in 2017. Upon the examination of competent persons, the storage
quality of samples and cores is qualified.
10 DATA VERIFICATION
10.1 DATABASE
Productive exploration database in 2016 was provided by Hubei Geological
Survey Institute of Coal in Excel. Productive exploration database of intensive
exploration in 2017 was provided by Hubei Geological Survey Institute of Coal
in Excel. Prospective exploration database of intensive exploration in 2017 was
provided by Sinomine Resource Exploration Co., Ltd. in SURPAC. The
estimation process shall be conducted in strict accordance with relevant
processes required for the software. After original data used is organized as
data file according to the requirement of GEOVIA Surpac software, it shall be
checked and amended in contrast with original data one by one through manual
work; borehole geology database shall be established after the introduction into
GEOVIA Surpac, and relevant data (such as sample length, grade, engineering
deficiency or duplication etc.) in data file shall have a data validity check and
pass it before modeling, which guarantees the reliability of source data.
10.2 On-Site Verification
From July 1 - 6, 2017, Zhang Xueshu, a competent person, verified the
exploration on site, checked the database and deemed that the data in
database is reliable. The supervision work at other times was executed by field
supervisors based on QA/QC procedures audited by the competent person or
under the supervision of the competent person.
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11 MINERAL RESOURCE ESTIMATE
11.1 Estimation Results of Predecessors
11.1.1 Productive exploration in 2016
(1) Estimation scope
Estimation scope includes 3 parts, namely productive exploration (south
area), productive exploration (north area) and productive exploration
(prospective area) (see Fig. 11-1). Estimation area reaching productive
exploration reserves is 1.46km2, estimation area of detailed survey reserves is
0.447km2, and estimation area of prospective exploration resources is
0.301km2.
(2) Industrial index
1) Limonite horizon: Ni≥0.5%, Mg≤1%;
2) Eluvium: Ni≥0.5%, Mg≥1% (excluding gravel);
3) Rocky saprolite: Ni≥0.5%, Mg≥1% (containing gravel);
4) The standard and method to divide upper and lower rocky saprolite is
based on the content of Ni and Mg in gravel samples that are less than 2mm
and the proportion of gravel that are more than 2mm. Saprolitemust be found
first, namely Ni≥0.5% and Mg≥1%. Secondly, the gravel content in upper rocky
saprolite is low, its granularity varies from 2~100mm, and in general, gravel
volume content is less than 30%; while the gravel content in lower rocky
saprolite is high, its granularity varies from 20~500mm, and in general, volume
content is more than 50%.
5) Minable thickness of ore body: 0.5m.
6) Eliminating thickness of horse-stone: 1~2m.
(3) Estimation method and geology interpretation
Ore body is like lamelleted and lentoid, the overall condition is table. So
resources/reserves estimation is conducted through horizontal projection. Ore
boundaries at different horizons are divided according to industrial index. The
resources levels are bordered by the borehole at the extreme edges of different
Mineral Resource & Ore Reserve Estimate in 2017 Ramu NiCo Management (MCC) Limited
58
exploration grids, without extrapolation.
(4) Data processing
From June to November 2016, 9,729.28m/668 holes were completed for
exploration (drilling exploration); 8,398 basically analyzed samples were
completed, at the same time, part of data from Highlands Pacific Limited was
used.
Contents related to ultra high grade were not seen.
(5) Density
Red limonite (O): 0.95t/m3;
Yellow limonite (L): 0.95t/m3;
Saprolite(S): 0.87t/m3;
Upper rocky saprolite (R1): 0.86t/m3;
Lower rocky saprolite (R2): 0.86t/m3.
Although >2mm gravel in desity samples collected from the lower rocky
saprolite (R2) have been eliminated during the processing, <2mm gravel still
takes a great part in samples. Actually measured ore desity of lower rocky
saprolite (R2) is 1.20t/m3, and the error is relatively large. To more accurately
calculate the reserves, desity measurement parameter of 0.86t/m3 in Report on
Capital Construction Prospecting for KBK(B) Area is employed.
(6) Resources Category
According to the relevant principle of the Classification for
Resources/Reserves of Solid Fuels and Mineral Commodities and
Specifications for Copper, Lead, Zinc, Silver, Nickel and Molybdenum Mineral
Exploration, and in combination with the geological conditions and exploration
engineering control degree in this area, the basis for classification of types is
determined as follows:
1) Exploration engineering with the grid of 50×50m has reached the
degree of projects at the productive exploration stage. Ore body is delineated,
the continuity of ore body is determined, and geologic feature of ore deposit,
ore quality as well as mining technology conditions are found out in details. It is
Mineral Resource & Ore Reserve Estimate in 2017 Ramu NiCo Management (MCC) Limited
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measured economic resource (121).
2) Exploration engineering with the grid of 100×100m has reached the
degree of projects at the detailed survey exploration stage. Ore body is
delineated, the continuity of ore body is determined, and geologic feature of ore
deposit, ore quality as well as mining technology conditions are found out in
details. It is indicated economic resources (122).
3) Exploration engineering with the grid of 200×200m has reached the
degree of projects at the preliminary survey exploration stage. Ore body is
delineated roughly, the continuity of ore body is determined roughly, and
geologic feature of ore deposit, ore quality as well as mining technology
conditions are basically found out. It is indicated intrinsically economic
resources (332).
Gravel content of ore body in lower rocky saprolite (R2) is high, ore body
and gravel are mixed, and gravel content varies greatly both vertically and
horizontally, therefore, the resource amount is obtained against it independently
for the resources estimation, and is not included into the total resource amount.
(7) Estimation results
See Tables 11-1~11-2 for resources estimation results of all area.
Table 11-1 Summary for Productive exploration Resources Estimation Results of Ramu
NiCo in 2016
Exploration area
Ore Resource
Average grade (%)
Amount of metal (kt) Classification
(kt) Ni Co Ni Co
North area 1374 1.04 0.11 15.1 1.6 121
South area 10041.3 0.97 0.12 97.6 11.9 121
Total 11415.3 0.98 0.12 112.7 13.5 121
South area 2155.1 1.05 0.12 22.7 2.5 122
Prospective area
1503.3 1.12 0.11 16.8 1.7 332
Total 15073.7 1 0.12 152.2 17.7 121+122+332
Table 11-2 Summary for Productive exploration of the Lower Rocky Saprolite (R2 )
Mineral Resource & Ore Reserve Estimate in 2017 Ramu NiCo Management (MCC) Limited
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Resources Estimation Results of Ramu NiCo in 2016
Exploration area
Ore
Resource Average grade (%) Amount of metal (kt)
Remarks
(kt) Ni Co Ni Co
North area 553.0 1.14 0.05 6.3 0.3
South
area
Block 1 1051.5 1.05 0.08 11 0.8
Block 2 661.0 1.20 0.08 7.9 0.5
Block 3 730.3 1.20 0.08 8.8 0.6
Prospective area 608.5 1.02 0.03 6.2 0.2
Total 3604.3 1.12 0.07 40.2 2.4
11.1.2 In-fill Exploration in 2017
11.1.2.1 Prospective exploration
(1) Estimation scope
The resource estimated object of this time is located between the 77000
exploration line and the 80900 exploration line in the western area of Ramu
mine, with the estimated area of about 4.1km2.
(2) Industrial index
Consistent with the productive exploration in 2016
(3) Estimation method and geology interpretation
In this report, GEOVIA Surpac three-dimensional mineral resources
evaluation software developed by Geovia International Mining Software
Company is adopted to estimate the delimitation of ore bodies and resources
of Ramu, and the interpolation estimation method adopted is inverse distance
method. Ore boundaries at different horizons are divided according to industrial
index. The resources levels are bordered by the borehole at the extreme edges
of different densities of exploration grids, without extrapolation.
(4) Data processing
There are a total of 367 drilling projects collected this time, with the total
footage of 5216.27m: In the earlier stage, Highlands Pacific Limited constructed
4 drill holes with the footage of 91.45m, and 363 were constructed in 2017 with
the footage of 5124.82m.
There are 1640 primary lithology records are collected, including 17 from
Highlands Pacific Limited and 1623 from Sinomine Resource Exploration Co.,
Ltd.
Mineral Resource & Ore Reserve Estimate in 2017 Ramu NiCo Management (MCC) Limited
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Ramu NiCo collects 4697 test results in total.
The digital topographic mapping covering the mining area with scale of
1:1000 and 1:2000 is collected and prepared. The 1:1000 topographic data are
the working achievements in 2017, while the 1:2000 topographic data are the
working achievements made by predecessors in around 2007. The total area is
about 4.1km2. The topography scope of 1:1000 is about 2.96km2, while the
topography scope of 1:2000 is about 1.14 km2.
Through statistical analysis, the samples have no super high grade, and
no super high grade treatment is conducted. The sample combination length is
1m.
(5) Density, moisture and gravel content
Table 11-3 Statistical Table of Specific Gravity Sample and Moisture Measurement Results of Ore
Ore body Number
of samples
Wet density (g/cm3)
Dry density (g/cm3)
Average Moisture (%)
O (red limonite bed) ore body
20 1.77 1.13 36.41
L (yellow limonite bed) ore body
64 1.66 0.97 42.40
S (Saprolite) ore body 74 1.55 0.84 46.27
R1 (upper rocky saprolite) ore body
84 1.54 (gravel-containing)
0.92 (gravel-containing)
40.87
R2 (lower rocky saprolite) ore body
55 2.22 (gravel-containing)
1.61 (gravel-containing)
27.90
The ore block gravel mass content is obtained by interpolation processing
of the data of sample gravel mass content in software: the gravel content of
upper rocky saprolite (R1) is 18.12%; and the gravel content of lower rocky
saprolite (R2) is 49.87%.
(6) Ore block model
The size of ore block is 25m×25m×1m (North × East × height), and the size
of the smallest block is 12.5 m×12.5 m×0.5 m.
(7) Grade valuation
In order to estimate all the ore blocks in the ore block model, the valuation
process will be conducted for three times and the spheroid search radius will
be increased gradually by each time. The reference drillhole grid density is
100×100m. The search radius for the first time is 120m, the second time is
240m and the third time is 360m. The block model will be inspected every time
Mineral Resource & Ore Reserve Estimate in 2017 Ramu NiCo Management (MCC) Limited
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when the valuation process is conducted until all the blocks in the model are
valued. The spheroid parameter settings are shown in Table 11-4.
Table 11-4 Spheroid Parameter for Resources Estimation Searching of Ramu NiCo at
Prospective Area in 2017
Parameter Operation times
1 2 3
Search type Spheroid Spheroid Spheroid
Azimuth angle
0°
0°
0°
1.6
3.7
Dipping angle
Plunge angle
Principal axis /
secondary axis
Principal axis /
minimum axis
Search radius 120m 240m 360m
Minimum project
number
3 1 1
Maximum sample
number
15 15 15
Ore block
discretization
3×3×3 3×3×3 3×3×3
(7) Resources Category
The basis for classification of resource types is determined according to
the relevant principle of the Classification for Resources / Reserves of Solid
Fuels and Mineral Commodities and Specifications for Copper, Lead, Zinc,
Silver, Nickel and Molybdenum Mineral Exploration, and in combination with
JORC(2012) Code and the geological conditions and exploration engineering
control degree in this area. When the ore block in the ore block model is
estimated, the resources classification of the valued block for the first time
searching is determined as 332, the second time is 333, and the third time is
334.
Mineral Resource & Ore Reserve Estimate in 2017 Ramu NiCo Management (MCC) Limited
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(7) Estimation results
Table 11-5 Result Table for Resources Estimation of Ramu NiCo at Prospective Area
in 2017
Ore body Resources
Classification Ore (kt)
Average grade (%) Amount of metal (kt)
Ni Co Ni Co
O 332 5110 0.551 0.06 28.2 3.1
333 300 0.674 0.061 2.0 0.2
334 100 0.683 0.067 0.7 0.1
Subtotal 5510 0.56 0.06 30.9 3.3
L 332 5610 0.769 0.088 43.1 4.9
333 630 0.768 0.082 4.9 0.5
334 70 0.809 0.082 0.6 0.1
Subtotal 6310 0.769 0.087 48.5 5.5
S 332 5650 0.822 0.1 46.4 5.6
333 880 0.85 0.095 7.5 0.8
334 190 0.831 0.085 1.5 0.2
Subtotal 6720 0.826 0.099 55.5 6.6
R1 332 2890 0.755 0.083 21.9 2.4
333 310 0.798 0.086 2.5 0.3
334 190 0.829 0.075 1.6 0.1
Subtotal 3390 0.763 0.083 25.9 2.8
R2 332 3010 0.765 0.083 23.0 2.5
333 450 0.845 0.077 3.8 0.3
334 460 0.778 0.066 3.6 0.3
Subtotal 3920 0.775 0.08 30.5 3.2
Total 25850 0.744 0.082 191.3 21.4
11.1.2.2 Productive exploration
The resources estimation method and parameters are consistent with the
peripheral exploration in 2017; the classification of resources/reserves is
consistent with the productive exploration in 2016, but the R2 ore bed
resources/reserves are also estimated by classification this time. The
resources/reserves estimation results are shown in Table 11-6.
Mineral Resource & Ore Reserve Estimate in 2017 Ramu NiCo Management (MCC) Limited
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Table 11-6 Resources Estimation Results Table of Ramu NiCo at Productive
exploration Area in 2017
Ore
body
Resource
Category Ore (kt)
Average grade (%) Amount of metal (kt)
Ni Co Ni Co
O
121 1818.1 0.786 0.078 14.3 1.4
122 53.8 0.898 0.116 0.5 0.1
332 15.4 0.835 0.091 0.1 0
Subtotal 1887.4 0.790 0.080 14.9 1.5
L
121 2597.1 0.877 0.090 22.8 2.3
122 90.8 0.804 0.108 0.7 0.1
332 97.5 0.765 0.085 0.7 0.1
Subtotal 2785.4 0.870 0.090 24.2 2.5
S
121 4261.8 0.939 0.124 40 5.3
122 210.3 0.851 0.102 1.8 0.2
332 126.4 0.955 0.114 1.2 0.1
Subtotal 4598.4 0.936 0.123 43 5.7
R1
121 1702 1.106 0.096 18.8 1.6
122 101.2 1.096 0.099 1.1 0.1
332 41.5 1.107 0.082 0.5 0
Subtotal 1844.7 1.105 0.096 20.4 1.8
R2
121 945.4 1.175 0.064 11.1 0.6
122 159.1 0.945 0.063 1.5 0.1
332 31 1.287 0.063 0.4 0
Subtotal 1135.6 1.146 0.064 13 0.7
Total 1225.15 12251.5 0.099 11.56 115.6
Grand
total
121 11324.4 0.945 0.100 107 11.3
122 615.2 0.913 0.094 5.6 0.6
332 311.9 0.943 0.095 2.9 0.3
11.2 Comments on the historical resourecs estimation
The productive exploration work in 2016 basically met the demand for mine
production; however, core failed to be reserved and QA/QC did not carried out
for sample processing and analysis and test, so that the data reliability was
decreased. In addition, the resources of R2 ore bed failed to be classified.
The infill exploration work in 2017 basically met the demand for mine
production, but the resources classification of R2 ore bed was slightly higher.
Mineral Resource & Ore Reserve Estimate in 2017 Ramu NiCo Management (MCC) Limited
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11.3 Estimation results
Original estimation results are directly used for the productive exploration
work in 2016. The original 121 reserves are determined as the resources
indicated in the JORC code, the original 122 reserves are determined as the
resources inferred in the JORC code and the original 332 reserves are
determined as the resources inferred in the JORC code. In addition, due to the
complex shape and poor continuity of the R2 ore bed, the resources in the R2
ore bed are all determined as the inferred resources. See Table 11-7 for results.
Table 11-7 Resources Estimation Results Table for Productive Eploration Area in 2016
Category
Ore
Resource Average grade (%)
Remarks
(Mt) Ni Co
Indicated 11 1.0 0.1
Inferred 7.3 1.1 0.1
Total 19 1.0 0.1
Original estimation results are directly used for the prospective exploration
work in 2017. The original 332 resources are determined as the indicated
resources, the original 333 and 334 resources are determined as the inferred
resources. In addition, due to the complex shape and poor continuity of the R2
ore bed, the resources in the R2 ore bed are all determined as the inferred
resources. See Table 11-8 for results.
Table 11-8 Resources Estimation Results Table for Prospective Exploration Area in
2017
Category
Ore
quantity Average grade (%)
Remarks
(Mt) Ni Co
Indicated 19 0.7 0.1
Inferred 6.6 0.8 0.1
Total 26 0.7 0.1
Original estimation results are directly used for the productive exploration
work in 2017. The original 121 reserves are determined as the measured
resources, the original 122 reserves are determined as the indicated resources
and the original 332 reserves are determined as the inferred resources. In
Mineral Resource & Ore Reserve Estimate in 2017 Ramu NiCo Management (MCC) Limited
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addition, due to the complex shape and poor continuity of the R2 ore bed, the
original 121 reserves in the R2 ore bed are determined as the indicated
resources, the original 122 reserves and the original 332 resources are all
determined as the inferred resources. See Table 11-9 for results.
Table 11-9 Resources Estimation Results Table for Productive Exploration Area in
2017
Category
Ore
quantity Average grade (%)
Remarks
(Mt) Ni Co
Measured 10 0.9 0.1
Indicated 1.4 1.1 0.1
Inferred 0.5 0.9 0.1
Total 12 0.9 0.1
Up to June 15, 2018, the total ore resources of lateritic NiCo ores
obtained in the exploration area of 2016-2017 are 57Mt, Ni0.9%, Co 0.1%;
measured resources are 10Mt, Ni0.9%, Co 0.1%; indicated resources are
32Mt, Ni0.8%, Co 0.1%; inferred resources are 14Mt, Ni0.9%, Co 0.1%. See
Table 11-10 for details.
Table 11-10 Resources Estimation Results Table for Exploration Area in 2016-2017
Item Category
Ore
Resource Average grade (%)
Remarks
(Mt) Ni Co
2016
Productive
exploration
Indicated 11 1.0 0.1
Inferred 7.3 1.1 0.1
Total 19 1.1 0.1
2017
Prospective
exploration
Indicated 19 0.7 0.1
Inferred 6.6 0.8 0.1
Total 26 0.7 0.1
2017
Productive
exploration
Measured 10 0.9 0.1
Indicated 1.4 1.1 0.1
Inferred 0.5 0.9 0.1
Total 12 0.9 0.1
Total
Measured 10 0.9 0.1
Indicated 32 0.8 0.1
Subtotal 42 0.8 0.1
Inferred 14 0.9 0.1
Total 57 0.9 0.1
Notes: 1. The Ni cut off grade is at 0.5%Ni, and the minimum mineable thickness
Mineral Resource & Ore Reserve Estimate in 2017 Ramu NiCo Management (MCC) Limited
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is at 0.5m.
2.Totals may not equal the sum of the component parts due to rounding
adjustments.
3.Ore tonnes (dry) represent the -2 mm economic portion of resource
mineralization in the rocky saprolite
4.The QA/QC is not executed in the Productive Exploration in 2016, so 2016
exploration result is not included.
5.The resource and ore reserves is updated on 15th June, 2018
11.4 Reliability
The resources estimation method adopted in the exploration work of 2016-
2017 is appropriate. In the estimation of this time, only the resources level is
adjusted as per the reliability level of data and according to the JORC code, but
it meet the demand of mine production.
11.5 Mining situation
Up to June 15, 2018, the mining scope is shown in Fig. 11-1. From
Dcecember 31, 2016 to June 15, 2018, according to the mining data, all the ore
resources consumed, mostly in KBK, are 4.3Mt, Ni1.0%, Co 0.1%; measured
resources are 3.6Mt, Ni0.9%, Co 0.1%; indicated resources are 0.5Mt, Ni1.3%,
Co 0.1%; inferred resources are 0.2Mt, Ni1.2%, Co 0.1%( Table 11-11).
Table 11-11 Estimation Results Table for Resources Consumed within Ramu Project
Category Resource Average grade (%)
Remarks (Mt) Ni Co
Measured 3.6 0.9 0.1
Indicated 0.5 1.3 0.1
Subtotal 4.1 0.9 0.1
Inferred 0.2 1.2 0.1
Total 4.3 1.0 0.1
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Fig. 11-1 Ramu NiCo Mining Areal Map
11.6 Remained In-situ Resource
Ramu project resource Updated the 2017 exploration result, minus
resources depleted are remained in-situ resource. Up to June 15, 2018, the in-
situ resource within all Ramu project area are 136Mt, Ni0.9%, Co 0.1%;
measured resources are 34Mt, Ni0.9%, Co 0.1%; indicated resources are 42Mt,
Ni0.9%, Co 0.1%; inferred resources are 60Mt, Ni1.0%, Co 0.1%. See Table
11-12 for details. Because 2017 exploration area is beyond the previous
exploration area, even the resource been consumed in 2017, but the total
resource is increased compared with the mineral resource in December 31,
Mineral Resource & Ore Reserve Estimate in 2017 Ramu NiCo Management (MCC) Limited
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2016(Table 11-13).
Table 11-12 The Remained in-situ Resource within all Ramu Project area
Category Resource Average grade (%)
Remarks (Mt) Ni Co
Measured 34 0.9 0.1
Indicated 42 0.9 0.1
Subtotal 76 0.9 0.1
Inferred 60 1.0 0.1
Total 136 0.9 0.1
Notes:
1. The Ni cut off grade is at 0.5%Ni, and the minimum mineable thickness is at
0.5m.
2.Totals may not equal the sum of the component parts due to rounding
adjustments.
3.Ore tonnes (dry) represent the -2 mm economic portion of resource
mineralization in the rocky saprolite
4.The QA/QC is not executed in the Productive Exploration in 2016, so 2016
exploration result is not included.
5.The resource and ore reserves is updated on June 15th, 2018
Table 11-13 Results of the Ramu Mineral Resources Estimate 2016
Category Resource Average grade (%)
Remarks (Mt) Ni Co
Measured 37 0.9 0.1
Indicated 22 1.0 0.1
Subtotal 59 0.9 0.1
Inferred 65 1.0 0.1
Total 124 1.0 0.1
1. The Ni cut off grade is at 0.5%Ni, and the minimum mineable thickness is at
0.5m.
2.Totals may not equal the sum of the component parts due to rounding
adjustments.
3.Ore tonnes (dry) represent the -2 mm economic portion of resource
mineralization in the rocky saprolite
4.The QA/QC is not executed in the Productive Exploration in 2016, so 2016
exploration result is not included.
5.The resource and ore reserves is updated on December 31th, 2016
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12 MAKET ASSESSMENT
12.1 Nickel
In the global and China nickel consumption structure, stainless steel
dominates. However, since 2015, the growth rate of stainless steel
consumption has slowed down significantly in recent years. At the same time,
the consumption of alloy steels and non-ferrous alloys in the high-end
consumption sector has steadily increased, and the nickel consumption in the
battery field has increased significantly. Nickel in battery industry is mainly used
for NI-MH and nickel cadmium batteries. With the development of new energy
vehicles and the release of the Planning for the Development of the Energy-
Saving and New Energy Automobile Industry (2012-2020), Lithium ions
containing ternary materials (LiNixCoyMn1-x-yO2) will become the main
development trend of new energy automobile batteries. Especially, because of
the high capacity and high energy density, high nickel ternary materials
(NCM811, NCA) will become the main application and development direction
of nickel in battery field. It is expected by SMM that the battery nickel
consumption in 2016 is about 35 thousand tons, the compound annual growth
rate thereafter will be 6.27%, and the nickel consumption is expected to reach
42 thousand tons by 2019.
Since there is still a certain difference in the aspect of per capita
consumption comparing with developed countries, although China’s economic
growth has slowed, the demand for nickel in the future will maintain a relatively
low growth rate at the current level. India currently maintains a high rate of
economic growth, and it will see a sharp increase in demand for nickel in the
future. Indonesia’s current nickel consumption is not high, but with its economic
development, the growth space in the future will be very large. The future
demand for nickel in developed countries will not change much. In general, the
demand for nickel in the world will continue to grow.
From the perspective of market analysis, although the demand for nickel
Mineral Resource & Ore Reserve Estimate in 2017 Ramu NiCo Management (MCC) Limited
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in the future will not grow as rapid as in the past, global nickel consumption will
continue to increase; nickel production and supply will be difficult to rise in a
short term, and will even continue to decline for a certain period of time. This
will, to a certain extent, prompt a rebound in nickel prices.
Fig. 12-1 Average annual spot price of international nickel (LME) from 2007 to 2016
12.2 Cobalt
As an important strategic metal, cobalt is widely used in industrial and
military fields. Cobalt is mainly used to produce lithium batteries, high
temperature alloys, heat resistant and corrosion resistant alloys, hard alloys
and magnetic materials, etc.
From the perspective of cobalt consumption structure, lithium battery
industry has been the largest cobalt consumption sector in the world in recent
years. Its main consumption forms include cobalt salts (cobaltosic oxide,
cobaltous sulfate) and electrolytic cobalt (Japan will import electrolytic cobalt to
process and produce lithium battery materials and finished products). As new
green environmental protection products which can be used to replace
traditional nickel-cadmium and lead-acid batteries, lithium-ion batteries have
many advantages, such as free of mercury, cadmium and other pollutants, long
service life and sufficient energy. Because of high added value and high profits,
the industry scale is developing rapidly. At present, the lithium-ion batteries are
not only widely used in electronic products such as mobile phone, notebook
0
5000
10000
15000
20000
25000
30000
35000
40000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
美元
/吨
当年均价 五年均价 十年均价
USD
/t
Current year 5 years 10 years
Mineral Resource & Ore Reserve Estimate in 2017 Ramu NiCo Management (MCC) Limited
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computer and digital camera, they are also used in some high-power batteries,
such as electric vehicles and electric bicycles. In 2012, the proportion of cobalt
for batteries was about 38.4% in the global primary cobalt consumption
structure, but this proportion had risen to 46.5% by 2016. Therefore, the lithium
battery industry is developing rapidly and the development prospects of cobalt
for batteries are promising.
Cobalt is also rapidly applied in high temperature alloys. High temperature
alloys are irreplaceable materials of high temperature hot section components
in aero-engines, rocket engines and gas turbine, etc. At the same time, they
are widely used in industries, medical treatment, automobile and national
defense and other related fields. With the increase in demand in the aerospace
market, the demand for high temperature alloys has also increased. In 2016,
due to the resuscitation of market demand for high temperature alloy industry,
the cobalt consumption in the field of high temperature alloys reached 15500t,
an increase of 6% than 2015. According to the forecast by Darton, a well-known
foreign institution, further improvement in the aerospace field and industrial gas
turbine market environment will continue to increase the demand for high
temperature alloys, and this will continue for about 10 years. In the next five
years, the average annual growth rate of global civil airliner deliveries will be
close to 4.5%, and it can be expected that the consumption of high temperature
alloys will increase steadily.
In recent years, because of the rapid growth of cobalt consumption in
battery industry, the consumption of cobalt in the world has been gradually
transferred to Japan, China, South Korea and other East Asian regions from
the past dominated western developed countries. At present, Japan and China
have replaced the United States to be the main consumer of cobalt.
Mineral Resource & Ore Reserve Estimate in 2017 Ramu NiCo Management (MCC) Limited
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Fig. 12-2 Domestic and International Cobalt Price Changing Curve
13 INFRASTRUCTURE AND LOGISTICS
13.1 Project Overview
Ramu NiCo Project, located in Madang, Papua New Guinea, is a world-
class mining project integrating mining, dressing and smelting. The Project
consists of major processes and supporting facilities, such as laterite quarrying,
ore slurry pipeline transportation, metallurgy by high pressure acid leaching,
deep-sea tailing drainage. Since full production was realized at the end of 2012,
the production capacity of Ramu NiCo Project has reached the basic design
index through production operation practice over five years, and achieved
operation up to production and standard. In 2017, the company produced
34,664 tons of metal nickel and 3,291 tons of metal cobalt. A special pre-
feasibility study was conducted for the exploration work in 2016-2017, and the
study reveals that the economic benefits are good.
The mine is located in the Kurumbukari area, 75km southwest of Madang,
at an altitude of 600m~800m. The smelting plant is located at the Basamuk
seaside, 55km southeast of Madang, at an altitude of 5m~60m. The ore slurry
MB
in
tern
atio
na
l m
ark
et
qu
ota
tion
(US
D/lb
)
Sp
ot p
rice o
f Ch
an
gjia
ng
(CN
Y 1
0,0
00/t)
The lowest price
of cobalt 99.3%
The hightest price
of cobalt 99.8%
The lowest spot price of Changjiang
The highest spot price of Changjiang
Mineral Resource & Ore Reserve Estimate in 2017 Ramu NiCo Management (MCC) Limited
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pipeline is a transport system connecting the mine and smelting plant, with a
total length of 135km.
13.2 Plant site
At the Basamuk bay where the smelting plant is located, one 50,000t wharf
has been built with the berth length of 335m. The wharf is available for the bulk
carriers with capacity within 50,000t and the product oil tankers and general
cargo ships with capacity within 40,000t.
There is a natural deep-sea trench near the smelting plant, which is the
best place for burial of tailings from the smelting plant in the deep sea. It can
fundamentally solve the problem of disposal of tailings.
13.3 Water supply
According to the data, a new water intake facility is set up at the place 4km
from the production fire fighting high water pool at the mine. The water source
level is 632m, and the assurance rate of water resources of the new water
source is assumed to be 100%.
The existing water source at the Yaganon river delta about 3.8km east of
the production fire fighting high water pool is the main water source of the
smelting plant. The water quality and quantity can meet the water use demand
of the smelting plant. The effluent treated from dense overflow of slurry is used
as the supplementary water source.
13.4 Power supply
The mining area and smelting plant have already been provided with a
power station. At present, the production load is relatively low, so the production
demand can be fully met.
13.5 Others
In the process of the development, construction and operation of Ramu
NiCo Project, Ramu NiCo Management (MCC) Limited has always been
adhering to the concept of “one Ramu, one community” and has been
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committed to developing relationships with the Papua New Guinea government,
community, shareholders and various social groups for many years and actively
fulfilling the obligations of the MOA agreement, thus provided numerous
business opportunities for the local community, gained good social
repercussions, and achieved good social effects.
At the same time, Ramu NiCo Management (MCC) Limited continuously
paid attention to the environmental protection of the project, attached great
importance to the communication and exchange with the interested parties of
the project, and strived to create an environmentally friendly and sustainable
Ruimu project. In 2015, it passed an environmental independent audit and
obtained an OEMP permit approved by the Ministry of Environment of Papua
New Guinea.
14 MINING PLAN
The current working is still fit for quarrying, opening up by highway
automotive transportation, stripping and mining by hydraulic excavator and
articulated truck, and using the mode of considering “mechanical mining +
hydraulic mining in partial mining area”. The spoil soil is transported to the
designated storage yard or goaf, and ore is directly loaded on the truck and
transported to the concentrating mill. Reclamation includes backfilling and
reclamation of goaf, which are carried out stepwise in the mining process, to
prevent water and soil loss and control erosion.
14.1 Stripping process
There are two stripping ways: one is the direct bulldozing process by
bulldozers, the other is the stripping process by excavators and trucks.
A bulldozer shall be used to push the upper coating of the ore body to a
certain area, and then the waste soil shall be pushed to the goaf after the
completion of mining. The humus is used for reclamation. The humus shall be
stacked in a centralized manner and suitable measures should be taken to
protect it from rain scouring. For the coating less than 2m, a bulldozer shall be
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used for direct bulldozing. Through the topographic analysis of the mining area,
80% of coating of mining area is less than 2m. When the thickness of coating
is greater than 2m, the transportation by excavators and trucks shall be adopted
for stripping. Due to the unevenness of the contact plane between the ore body
top board and adjacent rocks, depletion shall be reduced in mining as much as
possible. Therefore, a procedure of top board cleaning is designed and
recommended to be added between the stripping and mining links, with a
1.0m3~2m3 hydraulic backhoe being used for cleaning the top board, so as to
realize fine stripping.
Parameters of stripping surface:
Road width: 10m;
Width of working berm along the tendency: 50m~80m;
Length of working surface along the trend: 10m~20m;
Maximum slope angle of working line: 25°.
14.2 Mining process
Mining includes loading and transportation. Hydraulic excavators are used
for loading and articulated trucks are selected for transportation.
The designed height of working bench: 3m~5m, the face angle of bench:
65°.
Most of the surface slope within the mining range is 0°~30°, and the slope
is relatively gentle. There are two types of working berms: combination bench
and single bench. For the combination bench which is suitable for the area
where the surface slope is greater than 15°, 2~3 benchs are combined for
continuous mining. In production, we should consider whether to adopt the
combination bench or the single bench according to the situation on site. No
matter what form is selected, the working procedure of mining will be the same.
When the height of working bench is greater than 10m, or the working security
is affected, a bulldozer shall be used to conduct working surface descending;
When the thickness of ore body is greater than 15m, two benchs may be
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combined for mining.
Mining surface parameters:
bench height: 5m~10m;
Working berm width: 40m~50m;
Face angle of working bench: 65°.
The current annual mining capacity of the mine is 3.56Mt (dry weight) , with
stripping ratio of 0.51, mining loss rate of 5% and mining dilution rate of 3%.
15 PROCESSING PLAN
The concentrating mill consists of ore washing workshop, chromium
separation workshop and concentration workshop.
The ore washing workshop adopts two-time sieving and two-section
scrubbing flow, producing -3mm ore slurry (chromium separation material), saw
dust and +3mm spoil. -3mm ore slurry is pumped to the chromium separation
workshop, +350mm gravel is transported to the existing raw ore pretreatment
workshop for crushing by truck, and the crushed gavel is delivered to the
existing ore washing workshop for ore washing, thus recycling high-grade
laterite adhered on the surface of gravel; -350mm~+50mm gravel is used as
the road stone, and -50mm~+3mm gravel and saw dust residue are used as
the reclamation fill of the goaf.
The technological process for chrome selection of “hydrocyclone + spiral
chute roughing + table cleaning + table middling re-cleaning + improvement of
the ratio of chrome and iron by magnetic separator + control of particle size by
closed circuit grinding” is adopted. The spiral chute rejects and table rejects are
graded by grinding, and -150μm slurry automatically flows into the
concentration workshop. The nickel recovery rate in the ore slurry is 97.5%, and
the cobalt recovery rate is 91.91%.
The concentration workshop concentrates into 20% ore slurry by using the
high efficiency concentrator, and the ore slurry is pumped to lone-distance ore
slurry pipeline transportation system. The slurry pipeline adopts the "low
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concentration, large pipe diameter centrifugal pump turbulent transportation"
process scheme for dredging, namely the centrifugal pump turbulent
transportation scheme with inner pipe diameter of 610mm.
16 METALLURGICAL PLAN
Hydrometallurgy includes high pressure acid leaching, ore slurry
neutralization, CCD countercurrent washing, removal of iron and aluminum,
nickel cobalt hydroxide precipitates by neutralization, obtaining the intermediate
product of nickel cobalt hydroxide, and the tailing are discharged to the deep
sea landfilling procedure for treatment upon neutralization. For smelting
recovery rate, the nickel is 89%, and the cobalt is 88%。
17 ENVIRONMENT
The Ramu NiCo Project is a hydrometallurgical enterprise. Compared with
pyrometallurgical process, the emission of three wastes is relatively small. In
particular, the pressurized acid leaching process for treating nickel-bearing
laterite ore is called “green process”.
In the production process, dust collection systems or exhaust gas
scrubbing systems are set at all major pollution points. The concentration of
pollutants in the exhaust gas complies with relevant pollutant discharge
standards in China and Papua New Guinea. The tropical marine climate in the
region located is also conducive to the dilution and diffusion of atmospheric
pollutants.
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Fig. 16-1 Process Flow Diagram for Smelting
The waste water discharged out from the plant is general production waste
water without toxic and harmful substances. It will not cause harm to the
environment when discharged into the surface water system or into the deep
sea upon pH value is adjusted to 7.5 or so by lime.
It will not pollute the environment when the tailings generated in production
is directly discharged into the deep sea after neutralizing treatment.
Both the mine and smelting plant are far away from residential areas. In
addition, the noise in the plant area is up to standard, and the noise will not
pollute the surrounding environment.
Quarrying is adopted for mining. The mining waste rocks and topsoil are
used for backfilling and reclamation is conducted to conserve water and soil.
Post-dressing slurry
Slurry handling
High pressure acid
leaching feed slurry
concentration
High pressure acid
leaching
Recycle leaching and
slurry neutralization
CCD washing
Removal of iron and
aluminum by
neutralization
Iron and aluminum
removal and dense
separation
Solution storage
Ni Co hydroxide
precipitation
Ni Co hydroxide
precipitation separation
Barren liquor filtration
and product packaging
Neutralization of tailings
Delivery for deep sea
landfilling
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18 FINANCIAL ANALYSES
18.1 Investments
The project is a production mine and no additional investment is required
for resource development.
18.2 Costs
The mining, processing and metallurgy cost were USD62.58/t dry ore, sell
cost was USD8.75/t dry ore, general and administrative cost was USD2.95/t dry
ore. The freight cost of USD35 per tonne of MHP was applied.
Based on existing production capacity, the average annual total cost
(exclude taxes) of the project is USD238,712,000, and the total unit cost is
about USD 8,480 / (t.Ni).
18.3 Sales revenue, taxes and profits
The price of metals in the economic evaluation of the project is considered
on the following basis: The nickel price is calculated as per USD 12,000/t, and
the cobalt price is calculated as per USD 48,501/t. Combining the market sales
in 2017, the nickel containing valuation coefficient of nickel cobalt hydroxide is
considered as 75%, and the cobalt containing valuation coefficient considered
as 68%.
The production tax is calculated as per 0.25% of FOB sales revenue and
the resource tax is calculated as per 2% of FOB sales revenue after deducting
smelting costs (including smelting depreciation and other allocated expenses).
According to the tax policy of Papua New Guinea, the enterprise income tax
shall be exempted for 10 years since 2016. It is also possible to postpone the
application for tax avoidance, but there is some uncertainty. Therefore, it is
reliable to calculate the tax expenses as per the tax rate of 15%.
The feasibility study uses operating cost and product selling price to
estimate the economic benefits of the project. The results show that the project
has good economic benefits.
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19 ORE RESERVE ESTIMATE
19.1 Reserve classification
According to reserve modifying factors, the recoverable part from
measured resources are classified as proved reserves, and the recoverable
part from indicated resources are classified as probable reserves. Inferred
resources are treated as waste materials.
19.2 Field investigation
The competent person Mr. Xiang GAO has not been to mine site. However,
due to the mine has put into operation over five years since 2012, and open pit
mining was adopted with a conventional truck and excavator operating as well
as hydraulic mining within partial area. Mr GAO relied on the understanding and
finding during site visiting by Zhang Xueshu on July 1-6, considering that the
reserve conversion was reasonable to meet the demands of mining production.
19.3 Reserve Estimation Results
Up to June 15, 2018, the lateritic NiCo ore reserves within all Ramu project
area are 56Mt, with an average grade of Ni 0.9%, Co 0.1%; where proved
reserves are 24Mt@Ni 0.9%, Co 0.1%; probable reserves are 33Mt@Ni 0.9%,
Co 0.1%. The ore reserves are increased compared with the ore reserves in
December 31, 2016(Table 19-2).
Table 19-1 Results of Ore Reserves Estimation within all Ramu Project Area
Category
Ore
Reserve Average grade (%)
Remarks
(Mt) Ni Co
Proved 24 0.9 0.1
Probable 33 0.9 0.1
Total 56 0.9 0.1
Notes:
1.The Ni cut off grade is at 0.5%Ni, and the minimum mineable thickness is at 0.5m.
2.Totals may not equal the sum of the component parts due to rounding
adjustments.
3.Ore tonnes (dry) represent the -2 mm economic portion of resource
mineralization in the rocky saprolite
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4.The QA/QC is not executed in the Productive Exploration in 2016, so 2016
exploration result is not included.
5.The resource and Ore reserves is updated on June 15th, 2018
Table 19-2 31th December 2016 Ramu Ore Reserve by classification
Category
Ore
Reserve Average grade (%)
Remarks
(Mt) Ni Co
Proved 20 0.9 0.1
Probable 29 1.0 0.1
Total 49 1.0 0.1
Notes:
1.Cut-off grade is variable and equates to 0.58% nickel equivalent, including credit
forrecovered cobalt metal.
2.Totals may not equal the sum of the component parts due to rounding
adjustments.
3.Ore tonnes (dry) represent the -2 mm economic portion of resource
mineralization in the rocky saprolite
4.The QA/QC is not executed in the Productive Exploration in 2016, so 2016
exploration result is not included.
5.The resource and ore reserves are updated on December 31th, 2016
REFERENCES
[1] Sinomine Resource Exploration Co., Ltd., July 2009, Report on Capital
Construction Prospecting for Ramu NiCo KBK (A) Area in Madang, Papua New
Guinea
[2] Sinomine Resource Exploration Co., Ltd., September 2009, Report on
Capital Construction Prospecting for Ramu NiCo KBK (B )́ Area in Madang,
Papua New Guinea
[3] Hubei Geological Survey Institute of Coal, March 2017, 2016
Productive exploration Report on Ramu NiCo Project in Madang, Papua New
Guinea
[4] Sinomine Resource Exploration Co., Ltd., May 2018, 2017 Geological
Exploration Report on Prospective Area of Ramu NiCo in Madang, Papua New
Guinea
[5] Hubei Geological Survey Institute of Coal, May 2018, 2017 Geological
Mineral Resource & Ore Reserve Estimate in 2017 Ramu NiCo Management (MCC) Limited
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Exploration Report on Productive exploration Area of Ramu NiCo in Madang,
Papua New Guinea
[6] China ENFI Engineering Corporation. May, 2017, Ramu NiCo Mineral
Resources Estimate 2016
[7] China ENFI Engineering Corporation. May, 2017, Ramu NiCo Ore
Reserve Estimate 2016
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APPENDIX
APPENDIX A- Competent Person’s Consent Form
Competent Person’s Consent Form
Pursuant to the requirements of ASX Listing Rules 5.6,5.22 and 5.24 and
Clause 9 of the JORC Code 2012 Edition:
I, ZHANG XUESHU, confirm that I am the Competent Person for the Report
and:
I have read and understood the requirements of the 2012 Edition of the
Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves (JORC Code, 2012 Edition).
I am a Competent Person as defined by the JORC Code, 2012 Edition, having
12 years field exploration and resources estimation experience since 2006
across Indonesian, Myanmar and Philippines that is relevant to the style of
mineralization and type of deposit described in the Report, and to the activity
for which I am accepting responsibility.
I am a Fellow Grade Member of The Australasian Institute of Mining and
Metallurgy (FAusIMM), with the Member Number is No:320467.
I have reviewed the Report and taken part in the field exploration works relevant
to the Report to which this Consent Statement applies.
I am a full time employee and Chief Geologist of the Sinomine Resources
Exploration Co., Ltd., and have been engaged by the Ramu NiCo Management
(MCC) Limited to carry out field exploration works including drilling, sampling,
sample preparation and topographical survey and drill hole collar positioning
survey, and to prepare the documentation for the Ramu Ni laterite deposit in
Madang Province in Papua New Guinea, On which the Report is based, for the
period ended on 30 January,2018, and the effective date on 15 June, 2018, of
Mineral Resources and Ore Reserves estimation for the Ramu Ni laterite
deposit.
I verify that the Report of the Ramu NiCo Resource & Ore Reserve Estimate
2017 prepared for the Ramu NiCo Management (MCC) Limited, which is based
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APPENDIX B- Compliance Statements
The information in this announcement that relates to Resources is based on information
compiled by or under the supervision of Mr. Zhang Xueshu of Sinomine Resources
Exploration Co., Ltd. (“Sinomine” hereinafter), a Competent Person who is a member of
The Australasian Institute of Mining and Metallurgy. Mr. Zhang Xueshu is the Sinomine’s
Chief Geologist. Mr.Zhang has sufficient experience relevant to the style of mineralization
and type of lateritic nickel deposit under consideration and to the activity he is undertaking
to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr. Zhang
consents to the inclusion in the report of the matters based on his information or information
derived from exploration works under his supervision in the form and context in which it
appears.
The information in this announcement that relates to Ore Reserves is based on information
compiled by or under the supervision of Mr. Xiang GAO of part-time employee of Sinomine
Resources Exploration Co., Ltd. (“Sinomine” hereinafter), a Competent Person who is a
member of The Australasian Institute of Mining and Metallurgy. Mr.GAO has sufficient
experience relevant to the style of mineralization and type of deposit under consideration
and to the activity he is undertaking to qualify as a Competent Person as defined in the
2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves". Mr.GAO consents to the inclusion in the report of the
matters based on his information in the form and context in which it appears.
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APPENDIX C-JORC TABLE 1
Section 1 Sampling Techniques and Data
(Criteria in this section apply to all succeeding sections)
Criteria Explanation
Sampling techniques
• Nature and quality of sampling (e.g. cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.
1/2 core splitting sampling of drill core
• Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.
All holes are sampled continuously in productive exploration in 2016, with the basic sampling length as 1m. When the distance between sampling point and the lamination position is no more than 0.5m, combined sampling may be applied; separate sampling shall be applied when the distance is greater than or equal to 0.5m.
The sample splitting knife is applied for 1/2 splitting the soil horizon for sampling as chemical analysis, and the rest of 1/2 sample is discarded; the full-core sampling is applied for the rocky saprolite.
Part of cores was reserved in the intensive exploration in 2017.
• Aspects of the determination of mineralisation that are Material to the Public Report. In cases where ‘industry standard’ work has been done this would be relatively simple (eg ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.
The industrial standards of China, JORC standards and mine generation demands were combined for sampling, the way of which was consistent with the lateritic nickel ore.
Drilling techniques Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).
For core drilling, the method of hard alloy drilling accompanied by diamond drilling was mainly applied in drilling exploration. Φ94~110mm open hole and Φ91mm final hole.
Cores were not oriented. The 2016 productive exploration and 2017 productive
and drilling exploration were carried out by Hubei Geological Survey Institute of Coal, and the 2017 prospective and drilling exploration was carried out by Sinomine Resource Exploration Co., Ltd.
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Criteria Explanation
Drill sample recovery
Method of recording and assessing core and chip sample recoveries and results assessed. • Measures taken to maximise sample recovery and ensure representative nature of the samples. • Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.
The core recovery rate was enabled with drilling exploration and recording.
The core recovery rates of all the constructed 668 boreholes in the productive exploration in 2016 were between 79.05% and 100.00%. The core recovery rates of all the constructed 363 boreholes in the prospective exploration in 2017 were between 85% and 100.00%, with an average full-borehole recovery rate of 94%. The recovery rate of all the 702 boreholes constructed in the productive exploration in 2017 was qualified.
The recovery rate and grade was found irrelevant.
Logging
Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies. • Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography. •The total length and percentage of the relevant intersections logged.
All boreholes were subject to the detailed geological record to meet the demand of resources estimation.
The recording is qualitative and semi-quantitative, and all cores were photographed before sampling. All cores were recorded.
Sub-sampling techniques and sample
preparation
If core, whether cut or sawn and whether quarter, half or all core taken. • If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry. • For all sample types, the nature, quality and appropriateness of the sample preparation technique. • Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples. • Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling. • Whether sample sizes are appropriate to the grain size of the material being sampled.
The core was split by a sampling knife, with 1/2 for sampling; all cores from the gravel-containing horizon were sampled.
No non-core sample was sampled. The sample processing and the preparation of chemical
analysis sample were conducted as per Chinese specifications. Sample processing is divided into coarse crushing and fine crushing. Every stage also includes crushing, screening, uniformly mixing and splitting. The processing method is suitable for lateritic nickel ore and complies with the requirements of mine.
Cores were not reserved in 2016, part of cores was reserved in 2017 and the acquisition test of replicate sample of core was not conducted.
The sample size matched with the granularity of the sampled target mineral.
Quality of assay data and laboratory tests
The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total. • For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc. • Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision
The sample analysis was carried out by the testing laboratory of the mine.
Test method: test samples are dissolved by hydrochloric acid, nitric acid, hydrofluoric acid and perchloric acid. In the nitric acid medium, the inductively coupled plasma emission spectrometer (Varian 700-ES) is used to measure the mass concentration. The measured scope of NiCo for the method is 0.02~10.0%, which satisfies the production need of the
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Criteria Explanation
have been established. mine. According to the data of the mine, the detection limits of Varian 700-ES for Ni and Co are 5.0μg/L and 13.0μg/L respectively, which meet the needs of test method.
The quality control procedures were not implemented in the productive exploration in 2016.
Quality control (including standard sample, blank sample and duplicate sample) was enabled in the intensive exploration in 2017, while the external experimental examination was not, and the standard sample was the nonstandard material sample. The accuracy of analysis and test not met the production requirements of the mine.
Verification of sampling and assaying
The verification of significant intersections by either independent or alternative company personnel. • The use of twinned holes. • Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols. • Discuss any adjustment to assay data.
It was not verified.
Location of data points
Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation. • Specification of the grid system used. • Quality and adequacy of topographic control.
RAMU93 coordinate system (independent coordinate system of the mining area) was applied for the plane coordinate of the survey area, and RAMU93 elevation system (independent elevation system of the mining area) for elevation.
Hi-Target Statistic GPS was applied for surveying the first-stage planar control measurement in the mining area in the productive exploration in 2016. For the mapping method of the topographic map of the mining area, the total station (TOPCON EOS602) was applied for acquiring field topographic points, and South GASS7.1 mapping software was applied for indoor mapping. RTK or total station was applied for borehole survey. 1.06km2 of 1:1000 topographic survey was finished in the mining area, and 668 boreholes were surveyed.
In the prospective exploration in 2017, it was found that the control points mapped in 2006 and 2013 were well preserved, with plane and elevation precision meeting the demands of this survey after check. Mapping base points were surveyed directly by virtue of GPS-RTK. If GPS-RTK cannot be applied in the dense vegetation area, the total station polar method and the connecting traverse method were applied. The field mapping method of total station was applied in the dense vegetation area of the survey area, and
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Criteria Explanation
GPS-RTK field mapping method for the rest of areas. South GASS9.2 mapping software was applied for indoor mapping. Total station was applied for borehole survey. 2.96km2 of 1:1000 topographic survey was finished, and the 363 boreholes were surveyed.
The survey method of productive exploration in 2017 was the same as that of prospective exploration in 2017, and 702 boreholes were surveyed.
The 1:1000 topography of partial region was formed by processing the 1:2000 topographic map in the prospective exploration in 2017, which had certain effect on the accuracy and reliability of the results of resources estimation.
Data spacing and distribution
Data spacing for reporting of Exploration Results. • Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied. • Whether sample compositing has been applied
The grids drilled in different areas in 2016 productive exploration were 50×50m, 100×100m and 200×200m; the drilling grid in 2017 prospective exploration was 100×100m; the drilling grid in 2017 productive exploration was 50×50m. A sample was 1m in length. The data density and distribution met the estimation of the indicated and inferred resources.
The 1m long composite sample was used in the intensive exploration in 2017.
Orientation of data in relation to geological
structure
Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type. • If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.
The lateritic nickel ore was stably mineralized and mainly affected by lithology and topography and less affected by structure.
The boreholes were straight; mineralization was not obviously related to structure.
Sample security The measures taken to ensure sample security.
Samples were taken care of by Hubei Geological Survey Institute of Coal during sampling and processing in the productive exploration in 2016. Original and duplicate samples with maximum particle size of -200 mesh after processing were delivered to the testing laboratory of the Project Department of the mine in time together with the sample delivery list once a week. Exploratory boring cores shall be abandoned after split-core samples are collected.
Samples were taken care of by Sinomine Resource Exploration Co., Ltd. during sampling and processing in the prospective exploration in 2017. With respect to the original (50-100g) and duplicate (130g) samples obtained after smashing and splitting the 200 mesh samples, one batch was transferred to the Ground Survey Chamber of Mine every week, with 18 batches and 4,765 samples in total. After samples are checked and accepted by the Supervisor and
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Criteria Explanation
the appointed person of the Ground Survey Chamber, a sample handover list shall be signed, then samples can be send to the testing laboratory by the Ground Survey Chamber. Duplicate samples shall be kept by the laboratory. A hole spacing of 400m was taken for core preservation. Core preservation refers that the remaining cores after sampling are transferred to the core library for proper storage. Borehole roundtrip tickets for core preservation is sealed with tape, labels of the samples are placed in empty slot of full-core sampling, and borehole No., Ctn. No. of preservation as well as core depth are marked on both sides of core box. Core storage form shall be drawn up after cores are put in storage, recording Ctn. No. of borehole cores, hole depth and storage date. Core retention transfer form shall be drawn up in batches. After checked by the Supervisor and Ground Survey Chamber of Mine, it shall be handed over to the Ground Survey Chamber of Mine. There are 82 boreholes preserved this time, 270 boxes in total. All cores were transferred to the location specified by Party A.
Samples were taken care of by Hubei Geological Survey Institute of Coal during sampling and processing in the 2017 prospective exploration with the method consistent with that used in 2017 prospective exploration.
Audits or reviews The results of any audits or reviews of sampling techniques and data. The competent person Zhang Xueshu investigated on
site on July 1-7, 2017, considering that the sampling method and date met the demands of mine generation.
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Section 2 Reporting of Exploration Results
(Criteria listed in the preceding section also apply to this section.)
Criteria Explanation
Mineral tenement and
land tenure status
•Type, reference name/number, location and ownership including agreements or material
issues with third parties such as joint ventures, partnerships, overriding royalties, native
title interests, historical sites, wilderness or national park and environmental settings.
• The security of the tenure held at the time of reporting along with any known impediments
to obtaining a licence to operate in the area.
Prospecting License (EL193) of Ramu NiCo Project
covers an area of 194.95km2, and the validity expires on
February 26, 2018. Mining License (SML8) covers an area
of 54.4km2, and the validity expires on July 26, 2040.
The prevailing unincorporated joint venture mode of
international large mining development project is used for
Ramu Project. Three foreign shareholders: MCC Ramu NiCo
Management (MCC Ramu) Limited and the former project
developer Highlands Pacific Ltd., local companies on behalf
of Papua New Guinea and local land owners constitute the
joint venture of Ramu Project. MCC Ramu holds 85% shares
of the Project, and other shareholders hold 15% shares of
the Project. Ramu NiCo Management (MCC) Limited (Ramu
Management) is jointly entrusted by shareholders of the joint
venture to take charge of construction, development and
operation of the Project as the manager of the joint venture.
The Crocodile Farm around SML is a natural heritage in
Papua New Guinea, which shall be protected by the mine.
Relevant personnel shall be requested to relocate other
related graves and the places with cultural value as per local
relocation ceremony prior to the operation of the mine and
be compensated.
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Criteria Explanation
Explorationdone by other
parties Acknowledgment and appraisal of exploration by other parties.
Since the discovery in 1962, the deposit has
experienced different degrees of geological work borne by
different corporations in multiple phases. Exploration was
mainly conducted by Highlands Pacific Limited before 1999;
since the commencement of capital construction of Ramu
NiCo Project, MCC has successively carried out intensive
exploration in KBK area and local peripheral sections. The
above work already done is reliable.
Geology Deposit type, geological setting and style of mineralisation. Typical lateritic NiCo ore is produced on the weathered crust
of ultrabasic rock.
Drill hole
Information
• A summary of all information material to the understanding of the exploration results
including a tabulation of the following information for all Material drill holes:
• easting and northing of the drill hole collar
• elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole
collar
• dip and azimuth of the hole
• down hole length and interception depth
• hole length.
• If the exclusion of this information is justified on the basis that the information is not
Material and this exclusion does not detract from the understanding of the report, the
Competent Person should clearly explain why this is the case.
Only Mineral Resources and Ore Reserves are being
reported here. As no exploration results are being reported,
this section is not considered applicable.
Data aggregation
methods
In reporting Exploration Results, weighting averaging techniques, maximum and/or
minimum grade truncations (eg cutting of high grades) and cut-off grades are usually
Material and should be stated.
• Where aggregate intercepts incorporate short lengths of high grade results and longer
Only Mineral Resources and Ore Reserves are being
reported here. As no exploration results are being reported,
this section is not considered applicable.
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Criteria Explanation
lengths of low grade results, the procedure used for such aggregation should be stated
and some typical examples of such aggregations should be shown in detail.
• The assumptions used for any reporting of metal equivalent values should be clearly
stated.
Relationship between
mineralisation widths
and intercept lengths
These relationships are particularly important in the reporting of Exploration Results.
• If the geometry of the mineralisation with respect to the drill hole angle is known, its nature
should be reported.
• If it is not known and only the down hole lengths are reported, there should be a clear
statement to this effect (eg ‘down hole length, true width not known’).
Only Mineral Resources and Ore Reserves are being
reported here. As no exploration results are being reported,
this section is not considered applicable.
Diagrams
Appropriate maps and sections (with scales) and tabulations of intercepts should be
included for any significant discovery being reported These should include, but not be
limited to a plan view of drill hole collar locations and appropriate sectional views.
Only Mineral Resources and Ore Reserves are being
reported here. As no exploration results are being reported,
this section is not considered applicable.
Balanced reporting
Where comprehensive reporting of all Exploration Results is not practicable, representative
reporting of both low and high grades and/or widths should be practiced to avoid
misleading reporting of Exploration Results.
Only Mineral Resources and Ore Reserves are being
reported here. As no exploration results are being reported,
this section is not considered applicable.
Other substantive
exploration data
Other exploration data, if meaningful and material, should be reported including (but not
limited to): geological observations; geophysical survey results; geochemical survey
results; bulk samples – size and method of treatment; metallurgical test results; bulk
density, groundwater, geotechnical and rock characteristics; potential deleterious or
contaminating substances.
Only Mineral Resources and Ore Reserves are being
reported here. As no exploration results are being reported,
this section is not considered applicable.
Further work
The nature and scale of planned further work (eg tests for lateral extensions or depth
extensions or large-scale step-out drilling)
• Diagrams clearly highlighting the areas of possible extensions, including the main
geological interpretations and future drilling areas, provided this information is not
commercially sensitive.
Only Mineral Resources and Ore Reserves are being
reported here. As no exploration results are being reported,
this section is not considered applicable.
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Section 3 Estimation and Reporting of Mineral Resources
(Criteria listed in section 1, and where relevant in section 2, also apply to this section.)
Criteria Explanation
Database integrity
• Measures taken to ensure that data has not been corrupted by, for example,
transcription or keying errors, between its initial collection and its use for Mineral
Resource estimation purposes.
• Data validation procedures used.
The laboratory data of all samples were provided by the
laboratory of the mine.
The data from 2016 productive exploration and 2017 productive
exploration and from 2017 prospective exploration were respectively
checked and revised by Hubei Geological Survey Institute of Coal
and Sinomine Resource Exploration Co., Ltd.
The data was checked for overlapping, missing collar,survey,
lithological and assay data via Surpac software..
Site visits
Comment on any site visits undertaken by the Competent Person and the outcome
of those visits.
• If no site visits have been undertaken indicate why this is the case.
The competent person Zhang Xueshu investigated on site on
July 1-7, 2017, considering that the database and resources
estimation were qualified to meet the demands of mine generation.
Mr. Zhang also investigated currently open pit mining and
processing operation at Kurumbukari and Basamuk.
Geological
interpretation
Confidence in (or conversely, the uncertainty of ) the geological interpretation of
the mineral deposit.
• Nature of the data used and of any assumptions made.
• The effect, if any, of alternative interpretations on Mineral Resource estimation.
• The use of geology in guiding and controlling Mineral Resource estimation.
• The factors affecting continuity both of grade and geology.
There is strong confidence in the geological interpretation of the
lateritic layers (rock types) of the orebody. The upper layers,
especially the limonite layer are usually continuous, at least in their
presence/absence. The absence of the limonite layer is never
fortuitous or unexpected, but always due to erosion, and therefore
confined to well identified geographic areas. The grades including
cobalt, are usually continuous and show little lateral variability.
Core recording, sample analysis and surface mapping are
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Criteria Explanation
applied to interpret the geological domain of deposit.
No other geological interpretation is available at present.
The grade and lithological interpretations forms the basis for the
modeling. Grades have all been estimated constraining within the
lateritic layers (rock types).
The lateritic nickel ore in this area is of continuous and stable
geological and ore grades and is mainly affected by topography and
the degree of weathering.
Dimensions
The extent and variability of the Mineral Resource expressed as length (along strike
or otherwise), plan width, and depth below surface to the upper and lower limits of
the Mineral Resource.
The distribution ranges of lateritic nickel ore and dunite were
basically consistent. The working area of the exploration in 2016-
2017 was 7.9km2 in total with about 7.8km2 developed with lateritic
nickel ore. The ore bed was 0-30m in thickness and 0-20m in buried
depth.
Estimation
and modelling
techniques
The nature and appropriateness of the estimation technique(s) applied and key
assumptions, including treatment of extreme grade values, domaining, interpolation
parameters and maximum distance of extrapolation from data points. If a computer
assisted estimation method was chosen include a description of computer software
and parameters used.
• The availability of check estimates, previous estimates and/or mine production
records and whether the Mineral Resource estimate takes appropriate account of
such data.
• The assumptions made regarding recovery of by-products.
• Estimation of deleterious elements or other non-grade variables of economic
significance (eg sulphur for acid mine drainage characterisation).
The horizontal projection method was used in the productive
exploration in 2016 for resources estimation. The ultra-high grade
treatment was not enabled, and the boundary of ore body was
subject to drilling without extrapolation.
The software GEOVIA Surpac was used for the intensive
prospecting in 2017. Based on statistical analysis, the ultra-high
grade treatment was not enabled, the boundary of ore body was
subject to drilling without extrapolation, the size of ore block was
25m×25m×1m (north × east × height), and the inverse distance
method was used for grade difference.
By means of above methods, the resources were estimated by
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Criteria Explanation
• In the case of block model interpolation, the block size in relation to the average
sample spacing and the search employed.
• Any assumptions behind modelling of selective mining units.
• Any assumptions about correlation between variables.
• Description of how the geological interpretation was used to control the resource
estimates.
• Discussion of basis for using or not using grade cutting or capping.
• The process of validation, the checking process used, the comparison of model
data to drill hole data, and use of reconciliation data if available.
Hubei Geological Survey Institute of Coal in 2016 productive
exploration and 2017 productive exploration and by Sinomine
Resource Exploration Co., Ltd. in 2017 prospective exploration. The
resources levels were subject to minor adjustment on the basis of
this resources estimation.
The concentration recovery ratio of chromite according to the
mine data was 62.96%.
The High Pressure Acid Leach system (HPAL) was used in the
mine to produce NiCo, and the elements including iron, aluminum,
magnesium and manganese in ore were harmful. Above elements
in samples were analyzed in 2016 and 2017, indicating that the
distribution rules of the elements were consistent. The analysis in
2017 indicated that Al content reduced together with the reduction
of weathering degree from top to bottom, with average content
reducing from 6.17% in the ore body in Red limonite to 0.89% in the
ore body in lower rocky saprolite; average Mg content increased
from 0.19% in the ore body in Yellow limonite to 12.24% in the ore
body in lower rocky saprolite, which increased from top to bottom
with the reduction of weathering degree, and Mg content (0.36%) in
Red limonite which mixed with late deluvium was slightly higher that
in Yellow limonite due to the steep topography; the firstly increased
and then decreased contents of Mn and Co from bottom to top
showed an obvious positive correlation which representing that
manganese-cobalt soil was more contained in the ore body in
saprolitewith an average Mn content of 1.04%. Fe content also
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Criteria Explanation
declined from top to bottom with an average content reducing from
44.16% in the ore body in Yellow limonite to 20.5% in the ore body
in lower rocky saprolite. Due to the late deluvium mixed in reddish-
brown limonite horizon, in which Fe content (36.39%) was slightly
lower than in Yellow limonite.
A model of ore block with a size of 25m×25m×1m (north × east
× height) was employed in the intensive prospecting in 2017. The
grid for drilling exploration in this area was 100×100m and the grid
of local abandoned bores was 200×200m. The main length of
samples was 1m. The triaxial ratio of search ellipsoid was 3.7:1.6:1;
the first search radius was 120m with a minimum quantity of works
of 3, the second search radius was 240m with a minimum quantity
of works of 1, and the third search radius was 360m with a minimum
quantity of works of 1.
No selective mining units were assumed in this estimate.
There was not a strong correlation among elements; the
contents of Ni and Mg were gradually increased from top to bottom,
and to the bottom of lower gravel-bearing horizon, the content of Ni
was obviously reduced while that of Mg was gradually increased; the
content of Al was reduced to the increasing depth, and the contents
of Co and Mn were slightly higher in eluvium.
A geological database was created on Surpac platform with the
display style of borehole information (including mineralization,
lithology and label) set. A series of profiles along exploration lines
were established then. Based on the combination of various
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Criteria Explanation
geological factors on the profiles of exploration lines, the form and
occurrence horizon of ore body were analyzed; based on the
sampling and analysis results, the ore body boundary was
delineated on profile with a 0.5% boundary grade of Ni; with
reference to Al ≥5% for red limonite ore and Mg ≥1% for lower
gravel-bearing residual ore at the same time, ore was delineated in
meter percentage (0.25m %) for thin and rich ore body with sample
length less than 1m and grade higher than the lowest industrial
grade, and the eliminating thickness of horse-stone was 2m.
The coefficient of variation of Ni grade was 0.53, which was less
than the Sichel-t value of 0.75; the variation of nickel grade was
relatively stable without ultra-high grade, the ore body grade was
then treated as without ultra-high grade. No upper cut was used.
Through the exploration line profiles, the interpolation results of
distance power inverse ratio method and the original engineering
sample data were compared on 3D space and profile for ore body
boundary, ore block grade and resource coding, turning out that the
both matched well and the valuation effect was accurate and reliable
then.
Moisture • Whether the tonnages are estimated on a dry basis or with natural moisture, and
the method of determination of the moisture content.
Dry weight is used for the weight estimation by tonnage. The
wet weight of sample is weighed firstly, the sample is dried in drying
baker under a constant temperature of 105°, and then the dry weight
is weighed and subtracted from the wet weight to get water weight.
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Criteria Explanation
Cut-off parameters • The basis of the adopted cut-off grade(s) or quality parameters applied. The boundary grade is 0.5%, the eliminating thickness of horse-
stone is 2m and the minimum minable thickness is 0.5m.
Mining factors or
assumptions
• Assumptions made regarding possible mining methods, minimum mining
dimensions and internal (or, if applicable, external) mining dilution. It is always
necessary as part of the process of determining reasonable prospects for eventual
economic extraction to consider potential mining methods, but the assumptions
made regarding mining methods and parameters when estimating Mineral
Resources may not always be rigorous. Where this is the case, this should be
reported with an explanation of the basis of the mining assumptions made
Open mechanical mining with less open hydraulic mining is
employed for ore, with a mining loss rate of deposit of 5% and a
dilution rate of 3%.
Mining factors are not used in the resources estimation.
Metallurgical factors or
assumptions
• The basis for assumptions or predictions regarding metallurgical amenability. It is
always necessary as part of the process of determining reasonable prospects for
eventual economic extraction to consider potential metallurgical methods, but the
assumptions regarding metallurgical treatment processes and parameters made
when reporting Mineral Resources may not always be rigorous. Where this is the
case, this should be reported with an explanation of the basis of the metallurgical
assumptions made.
The main metallurgical criticality of the Resource was how to
treat ore with rock in it. Early on the metallurgical test work showed
that the grade of the resource may be upgraded by using gravity
techniques to remove the barren chromite and fine rock fragments
of the in-situ resource. Another point was the rocky saprolite
tonnage and grade have been estimated for a -2mm rock free
material as this more accurately reflects the potential feed to the
proposed beneficiation plant. The tonnage and grade of the rocky
saprolite have been estimated from the drill hole intercepts that have
been disaggregated into a -2mm and +2mm (rock) fractions which
in turn have been weighed and assayed separately. The inclusion of
a portion of the rocky saprolite resources in the indicated resource
category was studied in detail, this is called the upper rocky saprolite
(URS) layer. Only the rock free portion of rocky saprolite is
considered as a Resource.The resources in lower gravel-bearing
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Criteria Explanation
horizon is defined as the inferred resources.
Ore is treated by means of high pressure acid leach technology
in the mine, with products as NI(OH)2 and Co(OH)2.The mine
department, the processing plant and Metallurgy plan of Ramu
nickel project all reach the design capacity at present and the
production keeps stable and regular all the way.
Environmental factors or
assumptions
• Assumptions made regarding possible waste and process residue disposal
options. It is always necessary as part of the process of determining reasonable
prospects for eventual economic extraction to consider the potential environmental
impacts of the mining and processing operation. While at this stage the
determination of potential environmental impacts, particularly for a greenfields
project, may not always be well advanced, the status of early consideration of these
potential environmental impacts should be reported. Where these aspects have not
been considered this should be reported with an explanation of the environmental
assumptions made.
The natural environment in the mining area is good at present,
which maintains the virgin forest.
Currently, the ores produced from the mine are processed to be
pulp for smelting in BASAMUK smelting plant, the tailings of which
are subject to deep sea landfill, greatly reducing the pollution to
water sources in mining area.
Quarrying results in the reduction of vegetation coverage and
serious water and soil loss, then restoration and treatment have
been carried out in goaf in the mine by leveling land, covering
planting soil and planting in goaf, and the ecological environment in
part of goaf has been restored.
The household garbage is subject to burying and impermeable
treatment, doing no harm to the environment.
The pollution and influence of mining on the environment are
limited and totally under the controllable range.
Bulk density
• Whether assumed or determined. If assumed, the basis for the assumptions. If
determined, the method used, whether wet or dry, the frequency of the
measurements, the nature, size and representativeness of the samples.
In the lamination in 2016 productive exploration, 500 pieces
(100 pieces per ore bed) were subject to the dry/wet weight/small
density tests by calculating the volume of a 1m complete core,
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Criteria Explanation
• The bulk density for bulk material must have been measured by methods that
adequately account for void spaces (vugs, porosity, etc), moisture and differences
between rock and alteration zones within the deposit.
• Discuss assumptions for bulk density estimates used in the evaluation process of
the different materials.
testing the wet weight of the core, drying the core and testing its dry
weight. The gravel over 2mm with weight as that of -2mm ore was
removed in the gravel-bearing ore test.
The test method of dry/wet weight/small density in the intensive
prospecting in 2017 was the same as that in productive exploration
in 2016.
The result of density test of R2 ore bed in 2016 was significantly
higher than the previous result, so the previous data (0.86g/cm3)
was used for the density of R2 ore bed in resources estimation.
The density of rock is closely related to a rock type.
The bulk density of a rock type is remarkably consistent within
the rock type.
Classification
• The basis for the classification of the Mineral Resources into varying confidence
categories.
• Whether appropriate account has been taken of all relevant factors (ie relative
confidence in tonnage/grade estimations, reliability of input data, confidence in
continuity of geology and metal values, quality, quantity and distribution of the
data).
• Whether the result appropriately reflectsthe Competent Person’s view of the
deposit.
Based on the mineralization characteristics of ore body and the
production practice in mine, the grid of 50×50m in drilling exploration
was defined as the measured resources, grid of 100×100m as the
indicated resources and grid greater than or equal to 200×200m as
the inferred resources. All of R2 resources were defined as the
inferred resources.
Considering that the sample analysis in the productive
exploration in 2016 was not subject to QA/QC, the grid of 50×50m
in drilling exploration was defined as the indicated resources, and
grid greater than or equal to 100×100m as the inferred resources.
The Mineral Resources estimate appropriately reflects the view
of the Competent Person
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Criteria Explanation
Audits or reviews. The results of any audits or reviews of Mineral Resource estimates. No audits conducted.
Discussion of relative
accuracy/ confidence
• Where appropriate a statement of the relative accuracy and confidence level in
the Mineral Resource estimate using an approach or procedure deemed
appropriate by the Competent Person. For example, the application of statistical or
geostatistical procedures to quantify the relative accuracy of the resource within
stated confidence limits, or, if such an approach is not deemed appropriate, a
qualitative discussion of the factors that could affect the relative accuracy and
confidence of the estimate.
• The statement should specify whether it relates to global or local estimates, and,
if local, state the relevant tonnages, which should be relevant to technical and
economic evaluation. Documentation should include assumptions made and the
procedures used.
• These statements of relative accuracy and confidence of the estimate should be
compared with production data, where available.
The relative accuracy of the Mineral Resource estimate is
reflected in the reporting of the Mineral Resources to a
Measured, Indicated and Inferred classification as per the
guidelines of the 2012 JORC code. This has been covered in the
‘classification’ above.
The statement relates to global estimates of tonnes and
grade.
No production data was compared.
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Section 4 Estimation and Reporting of Ore Reserves
(Criteria listed in section 1, and where relevant in sections 2 and 3, also apply to this section.) Criteria Explanation
Mineral Resource
estimate for conversion
to Ore Reserves
• Description of the Mineral Resource estimate used as a basis for the conversion to an
Ore Reserve.
• Clear statement as to whether the Mineral Resources are reported additional to, or
inclusive of, the Ore Reserves.
The resources with purposes conversed to ore
reserve are described in detail in Section 1-3 of JORC
TABLEE 1.
The Mineral Resource estimates referenced above
are inclusive of the Ore Reserves.
Site visits • Comment on any site visits undertaken by the Competent Person and the outcome of
those visits.
• If no site visits have been undertaken indicate why this is the case.
The competent person Mr. Xiang GAO has not been
to mine site. However, due to the mine has put into
operation over five years since 2012, and open pit mining
was adopted with a conventional turck and excavator
operating as well as hydraulic mining within partial area.
Mr GAO relied on the understanding and finding during
site visiting by Zhang Xueshu on July 1-6, 2017, and
considering that the reserve conversion was reasonable
to meet the demands of mine generation.
Study status
• The type and level of study undertaken to enable Mineral Resources to be converted to
Ore Reserves.
• The Code requires that a study to at least Pre-Feasibility Study level has been undertaken
to convert Mineral Resources to Ore Reserves. Such studies will have been carried out
and will have determined a mine plan that is technically achievable and economically
viable, and that material Modifying Factors have been considered.
The feasibility research had done for the Project in
2004. The mine has met the original design capacity
since the start of production in 2012. The prefeasibility
study has done this time based on available economic
and technical data. Above production, operation and
research have provided relevant parameters for research
conversion.
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Criteria Explanation
Cut-off parameters • The basis of the cut-off grade(s) or quality parameters applied. The boundary grade is 0.5%Ni, the eliminating
thickness of internal waste is 2m and the minimum
minable thickness is 0.5m.
Mining factors or
assumptions
• The method and assumptions used as reported in the Pre-Feasibility or Feasibility
Study to convert the Mineral Resource to an Ore Reserve (i.e. either by application of
appropriate factors by optimisation or by preliminary or detailed design)
• The choice, nature and appropriateness of the selected mining method(s) and other
mining parameters including associated design issues such as pre-strip, access, etc.
•The assumptions made regarding geotechnical parameters (eg pit slopes, stope sizes,
etc), grade control and pre-production drilling.
• The major assumptions made and Mineral Resource model used for pit and stope
optimisation (if appropriate).
• The mining dilution factors used.
• The mining recovery factors used.
• Any minimum mining widths used.
• The manner in which Inferred Mineral Resources are utilised in mining studies and the
sensitivity of the outcome to their inclusion.
• The infrastructure requirements of the selected mining methods.
A plurality of open mining pits are employed in mine
production, and quarrying is suitable for the actual
production of the mine.
Mining surface parameters:
Bench height: 5m~10m;
Working berm width: 40m~50m;
Face angle of working bench: 65°.
The stripping ratio is 0.51, the mining loss rate is 5%
and the mining dilution rate is 3%.
The inferred mineral resources are not used in
mining study and are treated as waste.
It is a mine that has been put into production in the
Project, with infrastructure in good condition.
Metallurgical factors or
assumptions
• The metallurgical process proposed and the appropriateness of that process to the style
of mineralisation.
• Whether the metallurgical process is well-tested technology or novel in nature.
• The nature, amount and representativeness of metallurgical test work undertaken, the
nature of the metallurgical domaining applied and the corresponding metallurgical recovery
factors applied.
• Any assumptions or allowances made for deleterious elements.
Through ore washing, concentration and other ore
dressing processes, the ore slurry with concentration of
20% is thickened and pumped to the lone-distance ore
slurry pipeline transportation system. The slurry pipeline
adopts the "low concentration, large pipe diameter
centrifugal pump turbulent transportation" process
scheme for dredging, namely the centrifugal pump
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Criteria Explanation
• The existence of any bulk sample or pilot scale test work and the degree to which such
samples are considered representative of the orebody as a whole.
• For minerals that are defined by a specification, has the ore reserve estimation been
based on the appropriate mineralogy to meet the specifications?
turbulent transportation scheme with inner pipe diameter
of 610mm.
The nickel recovery rate in the ore slurry is 97.5%,
and the cobalt recovery rate is 91.91%.
Hydrometallurgy includes high pressure acid
leaching, ore slurry neutralization, CCD countercurrent
washing, removal of iron and aluminum, nickel cobalt
hydroxide precipitates by neutralization, obtaining the
intermediate product of nickel cobalt hydroxide, and the
tailing are discharged to the deep sea landfilling
procedure for treatment upon neutralization. For smelting
recovery rate, the nickel is 89%, and the cobalt is 88%.
This ore dressing and smelting process has been
verified by the 5-year production of ore.
Environmental
• The status of studies of potential environmental impacts of the mining and processing
operation. Details of waste rock characterisation and the consideration of potential sites,
status of design options considered and, where applicable, the status of approvals for
process residue storage and waste dumps should be reported.
In 2015, an environmental independent audit was
passed and the OEMP permit approved by the Ministry of
Environment of Papua New Guinea was obtained.
The Ramu NiCo Project is a hydrometallurgical
enterprise. Compared with pyrometallurgical process, the
emission of three wastes is relatively small. In particular,
the pressurized acid leaching process for treating nickel-
bearing laterite ore is called “green process”.
In the production process, dust collection systems or
exhaust gas scrubbing systems are set at all major
pollution points. The concentration of pollutants in the
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Criteria Explanation
exhaust gas complies with relevant pollutant discharge
standards in China and Papua New Guinea. The tropical
marine climate in the region located is also conducive to
the dilution and diffusion of atmospheric pollutants.
The waste water discharged out from the plant is
general production waste water without toxic and harmful
substances. It will not cause harm to the environment
when discharged into the surface water system or into the
deep sea upon pH value is adjusted to 7.5 or so by lime.
It will not pollute the environment when the tailings
generated in production is directly discharged into the
deep sea after neutralizing treatment.
Both the mine and smelting plant are far away from
residential areas. In addition, the noise in the plant area
is up to standard, and the noise will not pollute the
surrounding environment.
Quarrying is adopted for mining. The mining waste
rocks and topsoil are used for backfilling and reclamation
is conducted to conserve water and soil.
Infrastructure • The existence of appropriate infrastructure: availability of land for plant development,
power,water,transportation(particularly for bulk commodities),labour,accommodation; or
the ease with which the infrastructure can be provided, or accessed.
It is a mine that has been put into production in the
Project, with relatively complete basic design.
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Criteria Explanation
Costs
• The derivation of, or assumptions made, regarding projected capital costs in the study.
• The methodology used to estimate operating costs.
• Allowances made for the content of deleterious elements.
• The source of exchange rates used in the study.
• Derivation of transportation charges.
• The basis for forecasting or source of treatment and refining charges, penalties for failure
to meet specification, etc.
• The allowances made for royalties payable, both Government and private.
It is a mine that has been put into production in the
Project, which doesn’t require additional investment.
Refer to the actual production of the mine for
operating cost. The mining, processing and metallurgy
cost were USD62.58/t dry ore, sell cost was USD8.75/t
dry ore, general and administrative cost was USD2.95/t
dry ore.
No harmful elements.
Exchange rate of USD against CNY: 6.8
Refer to the actual conditions of the mine for
transportation cost, was about USD35 per tonne of MHP.
The royalty of government is 2%. The production tax
is calculated as per 0.25% of FOB sales revenue. Other
relevant taxes were considered.
Revenue factors
• The derivation of, or assumptions made regarding revenue factors including head grade,
metal or commodity price(s) exchange rates, transportation and treatment charges,
penalties, net smelter returns, etc.
• The derivation of assumptions made of metal or commodity price(s), for the principal
metals, minerals and coproducts.
The nickel price is calculated as per USD 12,000/t,
and the cobalt price is calculated as per USD 48,501/t.
Combining the market sales in 2017, the nickel containing
valuation coefficient of nickel cobalt hydroxide is
considered as 75%, and the cobalt containing valuation
coefficient considered as 68%.
The price of NiCo is determined by the prediction of
institutions including the World Bank and the sales status
of the mine.
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Criteria Explanation
Market assessment
• The demand, supply and stock situation for the particular commodity, consumption trends
and factors likely to affect supply and demand into the future.
• A customer and competitor analysis along with the identification of likely market windows
for the product.
• Price and volume forecasts and the basis for these forecasts.
• For industrial minerals the customer specification, testing and acceptance requirements
prior to a supply contract.
• Ramu has in place offtake agreements for MHP.
MCC relies upon advisory sources when assessing future
trends and factors influencing supply and demand. The
Ore Reserve estimate has been completed on the basis
that all product can be sold.
• Ramu is an operating asset and has established
relationships with customers and market acceptance for
its product.
• The Ore Reserve estimate has been completed on
the assumption that all product can be sold, based on
MCC and advisory forecasts.
• MHP from Ramu is an established product.
Economic
• The inputs to the economic analysis to produce the net present value (NPV) in the study,
the source and confidence of these economic inputs including estimated inflation, discount
rate, etc.
• NPV ranges and sensitivity to variations in the significant assumptions and inputs.
•The discount rate adopted for the optimization and
economic analysis is 10%, based on MCC corporate
forecasts.
• NPV shells are utilized to determine the range of pit
shells for various revenue factors The mine has reached
the designed production capacity The operational costs
are continuously improving but are based on the current
performance plus production improvements from defined
enhancement projects.
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Criteria Explanation
Social • The status of agreements with key stakeholders and matters leading to social licence to
operate.
• Ramu has undertaken considerable community
consultation in association with local, provincial, and
federal PNG government communication resulting in a
licence to operate under the relevant licences.
• Ramu participates in regular community meetings
that assist with the
communication of mine development, community
feedback, and thus the ongoing social licence to operate.
Other
• To the extent relevant, the impact of the following on the project and/or on the estimation
and classificationof the Ore Reserves:
• Any identified material naturally occurring risks.
• The status of material legal agreements and marketing arrangements.
• The status of governmental agreements and approvals critical to the viability of the
project, such as mineral tenement status, and government and statutory approvals. There
must be reasonable grounds to expect that all necessary Government approvals will be
received within the time frames anticipated in the Pre-Feasibility or Feasibility study.
Highlight and discuss the materiality of any unresolved matter that is dependent on a third
party on which extraction of the reserve is contingent.
Legal and marketing agreements associated with the
sale of MHP are in place through the off-take agreements.
• The Mine Lease is currently in good standing.
Ramu is an approved and operating mine and the
relevant environmental and mine closure plans are in
place. Waste dumping requirements and areas, along
with subsea tailings disposal, have been planned, have
regulatory approval and are in operation.
Future approvals will be required to allow the full
extraction of the Ore Reserve.
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Criteria Explanation
Classification
• The basis for the classification of the Ore Reserves into varying confidence categories.
• Whether the result appropriately reflects the Competent Person’s view of the deposit.
• The proportion of Probable Ore Reserves that have been derived from Measured Mineral
Resources (if any).
The Ore Reserve is classified as Proved and
Probable in accordance with the 2012 JORC Code,
corresponding to the resource classifications of
Measured and Indicated. Inferred Mineral Resources
were treated as waste in the Ore Reserve estimate.The
Ramu project continues to optimize performance. Like all
Ore Reserve statements, it contains both risk and
opportunities. The Competent Person feels that the
statement provides a reasonable balance and is
consistent with industry practice and the intent of the
2012 JORC Code.
• No Probable Ore Reserves are derived from
Measured Mineral Resources.
Audits or reviews • The results of any audits or reviews of Ore Reserve estimates. No audits conducted.
Discussion of relative
accuracy/ confidence
• Where appropriate a statement of the relative accuracy and confidence level in the Ore
Reserve estimate using an approach or procedure deemed appropriate by the Competent
Person. For example, the application of statistical or geostatistical procedures to quantify
the relative accuracy of the reserve within stated confidence limits, or, if such an approach
is not deemed appropriate, a qualitative discussion of the factors which could affect the
relative accuracy and confidence of the estimate.
• The statement should specify whether it relates to global or local estimates, and, if local,
state the relevant tonnages, which should be relevant to technical and economic
evaluation. Documentation should include assumptions made and the procedures used.
• Accuracy and confidence discussions should extend to specific discussions of any
applied Modifying Factors that may have a material impact on Ore Reserve viability, or for
The reserves are estimated by referring to the actual
production of mine, the result of which is relatively
reliable.
• The modifying factors that are most critical to the
operation are:
Nickel and cobalt price.
Ore grade
Metallurgical recoveries.
Production rates and operational costs.
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Criteria Explanation
which there are remaining areas of uncertainty at the current study stage.
• It is recognised that this may not be possible or appropriate in all circumstances. These
statements of relative accuracy and confidence of the estimate should be compared with
production data, where available.